HPOB Levels or “High Probable Options Buying Levels” are used as an options buying strategy for intraday trades in Nifty and Banknifty options. These levels are derived from the data available in NSE. We use Data Analysis to pitch these intraday levels for a high probable option buying strategy.
As you follow the HPOB Levels, do not listen to any other technical analysis along with it. Just do it as a Robo trading Because mixing technical analysis with HPOB levels may lead to the wrong direction for your trade.
You have to plot these levels in your Live spot Charts of Banknifty or Nifty. We prefer to draw it in Tradingview
Table of Contents
Trading Rules for HOPB Options Buying Strategy
You need to follow some rules for trading with HPOB Levels. Once you become an expert in this system, you can drive the trade your own way. We have provided some examples below
1. Watch the Videos and Learn the Trading concept with HPOB Levels
Watch this video and understand how to trade the Nifty and Banknifty options by using the Scalping Levels
2. We are using 15 Minutes candles for HPOB Trading
When we do options buying with HPOB Levels, the candle used is 15 minutes. We decide our Entry when the 15 minutes candle close. We don’t enter the 15 minutes candle close and also usually avoid the first Two 15 minutes candles for judging our entry. It means you can trade after 9.45 only.
3. Entry Conditions
To reduce loss, We use two types of criteria to enter a trade
1 – The Entry Candle must be small
2 – The Entry will be on a Retracement Basis
1 – The Entry Candle must be small
In this criteria, we will ensure the Entry Candle is small. (Entry Candle means the candle based on it we take the trade)
As per the image of the Banknifty chart, now it is a satisfying condition to enter a CE Trade. But we will not take the trade because the size of the Candle is big.
123 point is the size. ( It is the difference between the Opening point and Closing point of the candle).
The ideal size, we prefer below 90 Points in Banknifty & 40 in Nifty. It can vary as per your risk-bearing capacity
2 – The Entry will be on a Retracement Basis
In this criteria, we will not enter a trade immediately at the close of a 15 minutes candle above or below the HPOB Levels. Instead, once the candle is closed above or below the HPOB Levels, we will wait for the candle to come back to the half of the previous candle. This previous candle is the cable closed above or below the HPOB Level.
Here in the above chart, you can see the blue arrow. At this point, the candle closed above the HPOB Leve. But we did not enter at the close of the candle. We wait for the next candle t and to come back to the middle of the previous candle. It will give the options at the best price and also reduce the stop loss.
4. Profit Booking
Usually, we book the profit once it reaches our target. The First Target will be 3 times the Stop Loss or the next HPOB Level. Book Profit immediately if there is a sudden hike in the candle, even before going the Target. As per this strategy, our mindset should be like a Scalper
5. Stop Loss
Stop loss for CE is at the Bottom of the entry candle. But don’t keep the Stop Loss at the Exact bottom of the Candle.
The ideal Stop Loss is 10 points minus from the bottom in the case of Banknifty CE Options Buying .The ideal Stop Loss is 5 points minus from the bottom in the case of Nifty CE Options Buying
Stop loss for PE is at the Top of the entry candle. But don’t keep the Stop Loss at the Exact Top of the Candle.
The Ideal Stop Loss is 10 points more in the case of Banknifty PE Options Buying . The ideal Stop Loss is 5 points more in the case of Nifty PE Options Buying
Book loss once the candle reaches the Stop Loss. Follow Strictly
6. Risk Management
Risk Management is essential and it is your own. Set maximum loss per day as 2% of your capital and maintain your lot size as per the risk management
7. Strick Selection
The strike will be the one in between those HPOB Levels, which the candle breaks and the which we target
Please see the Example
If you are NEW to this system, start trading with only one Lot and increase it once you become an expert in this trading style. Don’t hold Options for the next day.
As you know, trading, especially option buying, is risky; we need to be careful while trading the share market.
Option buying by using HPOB levels is not a money-making machine. We need to follow it with ultimate discipline. Position sizing and controlling emotions are also an integral part of options trading.
As good traders, we need to cut the loss immediately before it becomes a terrible one. Most of the strategies will work in the market if we follow a strict stop loss.
