Nifty futures is an important part of derivative markets in India. One of the most commonly traded futures tool, Nifty future has become the most liquid contract. Nifty is a wholly owned subsidiary of the National Stock Exchange Strategic Investment Corporation Limited and for Indian market, NIFTY 50 index is the benchmark stock market index of NSE. There are agencies involved that provide intra-day calling services to notify the traders about the present behavior of the market. After subscribing, it helps with stock buying and selling activities.
Nifty future is a part of Future Contracts. Nifty future is a derivative contract traded on the NSE. The value of the contract is the final price of a contract with an expiration date. You can pick either a one month or a three months contract. Futures must not be confused with stock markets as in stock market, you pay actual cost to buy stocks but in future you pay only margin amount to trade in future market.
First rule of trading is to plan well. To get successful in any business, you need to have a plan. So, initiate your trading in the Nifty future with a full proof plan so that your trading goal is accomplished. You need to pre-define your trading plan and strictly follow it. As a trader, your task will be to devise a trading plan, observe nifty put or nifty call, knowing the system of entering the trade, price and the time of your entering the trade, why exactly you wish to enter the trade, how to stop the losses, and finally how to exit the trade. Having a trading plan will help you stay in the market for long and will also help you make consistent profits.
As per the nifty futures, the minimum lot comes of 75 units with needs an initial margin of Rs. 47000/-. This amount has to be deposited till the expiry of the contract. A future trader has two options to meet the margin requirement. One is cash margin where the traders will be needed to deposit 47k to the broker. Another option is stocks which can be used as collateral with the broker.
Beginners should consider trading only with 75 units that is one lot to start with. They can increase the lot size once they start making profits and capital gains. You have to know for sure that trading is an ever-learning process where you have to constantly upgrade your knowledge, skill, experience, belief, and control. Take up the bigger lot only when you find yourself responsible and skilled.
As a trader, your priority should be risk management. Capital protection must be the main aim. To protect your profits and save seed capital, you must develop a risk management mechanism. Whenever you buy short nifty futures, always use stop losses. Also, never be in hurry to start. You must know whether you are a trader or an investor. Following the trend of the market is necessary, you should not screw the market. You must also take care not over trade too.
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