Introduction to Scalping Strategy in FnO 360

Introduction to Scalping Strategy in FnO 360

Mostly, the Scalping Strategy is deployed in the range-bound or consolidation phase to win from the smaller counter move in a larger trend or in trend breakout to capture bigger moves. However, it is difficult to predict the trend breakout timeline.

Therefore, at 5paisa, all of these can be defined in advance with various features, covering both consolidation and breakout phases in the trend. You can provide all the input conditions for the strategy and submit them, then our system will do the live computation. When the strategy triggers, orders will be fired automatically.

Scalping Parameters: Explanation

Let’s understand the scalping parameters as it is the most crucial part of the strategy. The key features are as follows-
  • Define Up/Down points that are based on Spot or Future points for adding the position of the strategy.
  • Select Instrument (CE, PE, FUT or EQ ) and enter the number of times [1] for adding the position for both Up and Down Conditions
  • Define leg-wise target/stop loss.
A number of times is defined as the number of times the entry will be made and based on that the system will do Scalping.

For Example:

If you’ve entered 3 times then the system will enter into the positions for 3 times and then will stop automatically. Further, the entered positions will be managed based on the given overall target/stop loss conditions.

Steps to execute-

Let’s understand the process to enable scalping by the following steps given below-
  1. Login to the 5paisa web portal
  2. Go to smart strategies
  3. Select scalping
  4. Select trend Up or Down
  5. Then, choose from Future or Spot Points basis
  6. Enter scalping(Up/Down) points (let’s say 50 points from Current Market Price)
  7. Then, select expiry and instrument type (CE, PE, FUT or EQ and in case of CE and PE, select the strike based on ATM or ATM +/-)
  8. Enter the quantity for each leg to be entered 
  9. Enter the number of times you want to do scalping
  10. Select leg-wise TGT and SL Point (Point or Percentage basis)
Scenario for Trade Scalping-
  • Symbol- NIFTY
  • Reference Price– 18000
  • Scalping UP Points– 50
  • Instrument– BUY ATM CE
  • Quantity– 50
  • No of Times- 3
For the above-mentioned parameters, the system will fire an order (BUY ATM CE) for every UP move of 50 points from the reference price(18000). i.e. 1st order 18050, 2nd order at 18100, 3rd order at 18150. If you have mentioned leg-wise exit parameters as well, then orders will be squared off leg-wise. Otherwise, the overall strategy exit parameters at the bottom will be applicable. 

Important Points to Note- 
  1. Up/Down points calculation shall start from the reference price itself (i.e. the price at the time of submitting the strategy)
  2. The leg-wise TGT/SL shall be applicable based on the entered price
  3. If no selection will be done for Leg-wise TGT/SL then strategy profit/loss will be computed based on the target/stop loss at the bottom
To know more about it, click here!