Nifty future strategy for Trading consolidation and breakouts

When we say consolidation we mean market trading in a range, range is known as support resistance in this case. When nifty future is in consolidation period, most of the traders plot support level at bottom of price and resistance to top of price action. Now trading idea is to short sell nifty future when it reaches resistance line, buy nifty future when support level is being tested. This is widely used trading strategy for nifty future when consolidation is going on before the trend changes. Also stop loss for long trades will be placed below support and stop loss order for short sell trade in nifty future must be just above resistance, in both long and short trade we are using stop to negate our trading idea. Now let’s see how to trade breakouts, once nifty future breaks off the short term range or consolidation we call it as breakout. We never know when breakout will happen, so it’s always better to wait and watch then confirm such breakouts. Once breakout is confirmed, trader can open some positions on nifty future in the direction of that breakout. But remember golden rule for breakout is to wait and watch.