Open High Low Same Trading Strategy For NSE / BSE

This post was written by me in 2017 and I have added a few extra points in it and thought to republish it for my readers. The open high low same strategy is quite popular among Indian stock traders. In fact, I am watching this strategy for 9-10 years now and this is really easy to follow strategy for even novice traders. This strategy works well in all liquid scrips but I suggest you follow only Nifty 50 stocks with this strategy.

Advantage Of Open High Low Same Trading Strategy:

• Easy to use
• No need for prolonged analysis
• Just follow the market for a few minutes and you get the scrips for the day

How to find a BUY scrip with open high low same strategy?

1. Collect opening rates for Nifty-50 stocks
2. Find the scrips with open = low and they are your BUY scrips
3. Enter the trade after 15-30 minutes of the trade if the opening low is not breached
4. Keep a stop few ticks below the opening low
5. Keep a 1.5% to 2% profit target intraday basis
6. Do not carry forward the trade overnight

How to find a SHORT SELL scrip with open high low same strategy?

1. Collect opening rates for Nifty-50 stocks
2. Find the scrips with open = high and they are your SHORT SELL scrips
3. Enter the trade after 15-30 minutes of the trade if the opening high is not breached
4. Keep a stop few ticks above the opening high
5. Keep a 1.5% to 2% profit target intraday basis
6. Do not carry forward the trade overnight

You can also create a simple excel file to capture live data from your trading terminal. If you are using the Zerodha Pi terminal you can use the LINK TO EXCEL option to import live data from the Pi terminal to an excel sheet. Once you can import the data you can write some simple formulas to create a simple open high low same a trading system.

Creating a Zerodha Pi scanner on the strategy

You can also write a simple scanner on the Zerodha Pi platform. Just create a scanner with the following code for open low same BUY code:

OPEN=LOW

Now, you can create a list of symbols and scan on an hourly candle after 15-30 minutes of market opening. It will scan for scrips with open=low in the first hourly candle.

This strategy can also be used for automated trading in the NSE market. Traders can use Zerodha Pi bridge or AmiBroker software in automating their trades.

Modifications of the strategy and adding filters

Traders can modify this strategy and add filters to it in various ways.

• Some traders add a time filter. Say, they only take the trade after 1 hour of the market open. In this filter, some initial whipsaw can be erased off but sometimes adding this filter can reduce the profitability. In many scrips, sudden moves come in the first one hour. So, if you add this filter, you may lose some good trading opportunities.
• Few add a filter of VWAP or volume-weighted average price. In case of open = high, they take a sell trade only if price closes below VWAP in 5 minutes candle. Similarly, in case of open = low, they take a buy trade only if price close above VWAP in the same 5 minutes candle.
• Some even take the daily trend into consideration. They take a buy trade only if the daily trend is UP and takes a sell trade only if the daily trend is DOWN. For determining the daily trend they take the help of daily moving averages or daily SuperTrend indicator.

Live implementation of the open high low same trading strategy

As we have written that we can create an excel file and trade the OHL same scrips easily. We can add some target and stop loss to the system. In case of open = low buy setup, generally, the traders place the stop loss a few ticks below the opening low. On the other hand in the case of an open = high short sell setup, generally, they place the stop loss a few ticks above the opening high. In case of price breaks the opening high or opening low, that ends the trade and the setup becomes null and void.

In our website, we have created a page dedicated to the OHL same trading strategy. The page is complete with targets and a stop loss. Once the market opens the page will list the stocks that have open = low or open = high. The page will also automatically post a stop loss and 3 targets. target 1, target 2 and target 3.

We checked that these targets get achieved with high accuracy. We suggest you check this page after at least 10 to 15 minutes of the market opens.

Conclusion

So this open high low same is a super simple strategy and even novice traders can use this strategy with ease. But while going live with this strategy one needs to remember, that no strategy can be a holy grail and traders must use proper money management rules while taking the trades.

This strategy is historically proved to be quiet accurate and money-making. Hence, sticking to the strategy even if few trades produce loss is a must. This is ready to use strategy whether you use a Pi scanner or you use our OHL scanner page. Your comments in this regard can take this discussion forward.

Author: Indrajit Mukherjee

Indrajit is a professional blogger and trading system developer. Amibroker expert, Wordpress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely. View all posts by Indrajit Mukherjee