SMA 5/50 bracket scalp
This intraday strategy takes a moving-average crossover down to 1-minute NIFTY futures candles. It watches the gap between a 5-minute-long and a 50-minute-long simple average and trades either a confirmed cross or a convergence, where the fast average is closing in on the slow one and a cross looks imminent. Every trade gets a fixed bracket: a trailing stop, a target and a square-off before 15:00.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
The evidence contradicts the usual idea that crossover systems love trends. Trend days, sessions closing near their high or low, lost ₹66,287 over 84 trades, while choppy days made ₹45,820 over 83 and quiet sessions ₹41,850 over 108. One reason is in the rules: the convergence entry fires as the fast average closes in on the slow one, which on a trend day is usually a pullback against the main move, and most trades are held to 14:58. Calm markets suited it, with India VIX below 11.5 adding ₹58,065 over 69 trades, against a ₹20,476 loss over 116 in the normal band. Figures are before costs.
About this strategy
- Build 1-minute NIFTY futures candles each session and track the 5-bar and 50-bar simple moving averages; the 50-bar average is ready from about 10:05.
- Between 10:21 and 14:15, a crossover entry buys when the fast average has been below the slow one for four bars and above it for the last two; the mirror sells.
- A convergence entry buys when the fast average has been below the slow one and rising for six bars and is now within 0.02% of price; the mirror sells. By default both entry types are used.
- Each trade starts with a stop 0.75% from entry and a target 1% away; the stop trails in steps of 20 ticks as the trade gains.
- One trade at a time, and no new trades once the day's realised loss passes 1.5% of the position's value.
- Close anything still open at 14:58.
Why traders use it
Short-term average crossovers are a popular scalping trigger because they are objective and frequent. Entering on convergence tries to get in before the cross itself, where the move often starts. A bracket order, with stop, target and trail fixed at entry, takes discretion out of the exit, and a daily loss cap limits the damage on a bad day. The idea originally came from cash-stock scalping and is applied here to NIFTY futures.
The year in plain words
With default settings on NIFTY from 1 Oct 2025 to 30 Sep 2026, the strategy made 277 trades, won 46% and earned ₹28,144 before costs, a profit factor of just 1.04. Neither bracket level was reached often: 223 trades ran to the 14:58 square-off, 44 hit the stop and only 10 the target. The year swung widely, with March losing ₹68,984 and May gaining ₹42,158, and the drawdown before costs reached ₹1,40,364. After ₹20 per order and bid-ask slippage the result became a ₹47,861 loss. The thin edge did not survive costs.
What the settings do
Risks
- A 0.75% stop on a full NIFTY futures lot is a large rupee loss per trade, and stop fills can slip.
- Most trades end at the square-off rather than at the stop or target, so the bracket shapes the result less than expected.
- The drawdown of over ₹1.4 lakh before costs is large relative to the year's small gain.
- Signal frequency makes costs decisive.
Who it suits
Traders interested in automated intraday scalping on futures, who can run bracket-style orders and want to study how a crossover rule behaves on 1-minute data before and after costs.
Questions traders ask
What is a 5 and 50 SMA crossover strategy?
It buys when the 5-period simple moving average rises above the 50-period one and sells on the reverse. On 1-minute candles that means the last five minutes' average price crossing the last fifty minutes' average.
Is the SMA crossover scalp profitable on NIFTY?
From 1 Oct 2025 to 30 Sep 2026 it made ₹28,144 before costs but lost ₹47,861 after ₹20 per order and bid-ask slippage, over 277 trades. Past results do not guarantee future ones.
What does convergence mean here?
Convergence means the fast average has been rising towards the slow one for six bars and is now very close to it, so a crossover seems near. The strategy enters before the cross, aiming for a better price.
What is a bracket order?
A bracket order places an entry together with a stop loss and a target, so the exit is set the moment the trade starts. This strategy adds a trailing stop that moves in fixed tick steps as the trade gains.