Beginners who see markets on TV often ask me what is nifty future and how it is traded, what are the benefits of it, how to find out the trend. Here are the answers to some of your queries.
What is Nifty future?
Before I focus on Nifty future what actually the Nifty index is, So Nifty index is a container of 50 chosen stock (based on NSE’s criteria). In other words, 50 large cap stocks make the Nifty index, each of these stocks has the different weight based on its free float market capitalization. So some stocks impact nifty more than other. Now, Nifty future is an index that is actually traded (Bought or Sold) based on the prices of the Nifty spot. Daily volume of nifty future is much higher than anything that is traded in NSE (National stock exchange).
How to find Trend in Nifty future?
Finding out the trend on Nifty future is very easy task than it actually seems, all you need to do is, look into the daily or weekly chart and watch the series of price action. If the price is continuously making higher tops and higher bottoms then we say its an uptrend, if price action is making a series of lower tops and lower bottoms then its case of a downtrend.
If you find this difficult then I have created a special tool for finding out tend in nifty future, all you need to do is fill the few details and you will come to know the trend. Here is that Nifty Trend Finder tool.