Dip buy, 1% target
This positional NIFTY futures strategy buys dips and never uses a stop. A lot is bought when the market opens at least 1% below yesterday's close, and again near the close if the price is at least 1% below today's open. Each lot is sold separately once it is 1% above its own entry. Up to five lots can be open at once, and open lots are rolled into the next month at futures expiry.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
With 11 monthly series, no single condition has enough trades for a verdict, but the split is stark. The 4 series during which NIFTY fell more than 1% lost ₹8,95,835 without a win, because the rules kept adding lots into the decline and the expiry roll then closed them all at a loss. The 3 series during which NIFTY rose more than 1% made ₹4,04,911 as lots reached their targets. Series that started with NIFTY below its 20-day average lost ₹4,68,390 over 7. The asymmetry comes straight from the code: gains per lot are capped at 1%, while losses on up to five lots are not.
About this strategy
- At 09:20, if the session opened 1% or more below the previous futures close, buy one lot of the near-month NIFTY future (this check is skipped the session after a futures expiry).
- At 15:20, if the future is 1% or more below today's open, buy another lot.
- Each qualifying check adds a lot, as long as fewer than five lots are open; no entries are made on futures expiry day.
- Each lot has its own target: sell it once the future is 1% above that lot's entry price. There is no stop loss.
- On futures expiry day, close any lots still open at 15:15 and buy them again in the next month's contract at 09:20 the next session, keeping each lot's distance to its target.
Why traders use it
The idea is simple averaging: Indian equity indices have tended to recover from short dips, so buying weakness in fixed steps and taking a small, fixed profit on each step looks like steady income. Without a stop, a lot is never sold at a loss unless it is rolled, which feels comfortable. The method began as a slow, cash-market ETF approach and is popular because it needs no forecasts, only two checks a day.
The year in plain words
From 1 Oct 2025 to 30 Sep 2026 on NIFTY futures with default settings, the strategy lost ₹4,70,943 before costs and ₹4,85,774 after ₹20 per order and bid-ask slippage. Results are counted per futures series, each grouping all lots bought in that month: 11 series, 5 profitable. The damage came from forced closes at expiry when several lots were deep under water: March lost ₹4,78,439 and September ₹3,45,963, while April's rebound made ₹3,11,727. The maximum drawdown reached ₹5,08,326, showing how averaging down without a stop concentrates risk.
What the settings do
Risks
- There is no stop loss; with up to five leveraged futures lots, a sustained fall produces very large losses.
- Adding lots as prices fall is close to a martingale: exposure is largest exactly when the trade is going worst.
- Rolling at expiry realises the losses on open lots and pays roll costs each month.
- Futures leverage turns a method designed for a cash-market ETF into something far riskier.
- In this test the year's loss was several times the largest profitable month.
Who it suits
Only traders who fully understand averaging down on leverage, have margin for five NIFTY futures lots plus a deep loss buffer, and want to study why this approach behaves differently from buying an ETF in cash.
Questions traders ask
What is the buy-the-dip 1% target strategy?
It buys a fixed amount whenever the market falls 1%, either at the open versus yesterday's close or at the close versus today's open, and sells each purchase at a 1% gain. There is no stop loss. This version uses NIFTY futures and caps holdings at five lots.
Is buying every 1% dip in NIFTY futures profitable?
Not in this backtest. From 1 Oct 2025 to 30 Sep 2026 it lost ₹4,70,943 before costs and ₹4,85,774 after ₹20 per order and bid-ask slippage, with a maximum drawdown of ₹5,08,326. Past results do not guarantee future ones.
Why does it lose when most lots hit their target?
The small 1% gains are capped while the losses are not. When the market keeps falling, all five lots sit at a loss, and the monthly futures expiry forces them to be closed and rebought. A single bad month, such as March here, wiped out many small wins.
How is this different from buying a NIFTY ETF on dips?
An ETF bought in cash has no leverage and no expiry, so a holder can wait indefinitely for a recovery. Futures need margin, carry several times the exposure for the same capital, and must be rolled each month, turning paper losses into real ones.