Nifty_2MIN_Rangereversal_Short_Strategy

Summary

This strategy is an intraday trend-following system designed for the Nifty index on a 2-minute timeframe, focusing exclusively on short (sell) entries. It is engineered to identify failed bounces within established bearish trends.

Concept & Core Logic

The strategy uses a multi-layered approach to confirm downward momentum before triggering an entry:

Trend Confirmation: The script analyzes the slope and positioning of the 20-period and 200-period Exponential Moving Averages (EMA). Short signals are only valid when the EMA configuration confirms a prevailing bearish trend.

Retracement Zone Filtering: To optimize entry pricing, the strategy monitors the daily price range. It looks for the market to be within the 35% to 75% range of the day's movement, specifically identifying a temporary upward "relief rally" or bounce after a significant fall.

Candlestick Trigger: The execution occurs when a specific bearish reversal pattern appears during the relief rally:

Two consecutive bullish candles (representing the temporary bounce).

Followed by a strong, high-momentum bearish candle (signaling the resumption of the primary downtrend).

Risk Management

The strategy utilizes fixed exit parameters based on the underlying Nifty price points:

Take Profit: 28 points.

Stop Loss: 30 points.

Intended Use

This tool is intended for traders who study mechanical, rule-based systems. It demonstrates how moving average trends can be combined with range analysis and price action sequences to time entries during market retracements.

Disclaimer: This script is for educational and informational purposes only. It is not financial advice. All trading involves risk, and past performance is not indicative of future results. Please conduct your own research and backtesting before making any trading decisions.