The Ultimate Guide to Trading Monthly Expiry Highs & Lows for Consistent Returns

The Power of Monthly Expiry Levels

Monthly expiry trading offers one of the most reliable price action setups in the markets. By identifying the monthly expiry high and low, traders can develop a mechanical system for entering trades in the following month. This guide will teach you:

✅ Why Monthly Expiry Levels Matter
✅ How to Identify Key Monthly Levels
✅ Step-by-Step Trading Strategy
✅ Real Examples from Nifty, Bank Nifty & Stocks
✅ Risk Management for Consistent Profits

This strategy works because institutional traders use these levels for positioning, creating self-fulfilling prophecies in price movements.

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1. Understanding Monthly Expiry Price Behavior

Monthly expiry (last Thursday of each month) creates important reference points:

• Monthly High = Resistance zone for next month

• Monthly Low = Support zone for next month

• Breakouts above/below these levels often lead to strong trending moves

Why This Works?

1. Hedging Activity – Institutions adjust positions at these levels

2. Option Writers Defend – Major OI clusters form at these prices

3. Psychological Significance – Becomes a clear reference for all traders

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2. Step-by-Step Trading Rules

Step 1: Mark the Monthly Expiry Range

• Note the highest high and lowest low price during expiry day

• These become your key levels for next month

Step 2: Next Month’s Trading Plan

• Above Monthly High → Go Long (Futures/CE)

• Below Monthly Low → Go Short (Futures/PE)

• Between Range → Wait for breakout

Step 3: Position Management

• Entry: On confirmed breakout (close beyond level)

• Stop Loss: Other side of monthly range

• Target: 1:2 or 1:3 Risk-Reward

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3. Real Market Examples

Example 1: Nifty 50 

• June Expiry (29th May 2025)

  • High: 24892

  • Low: 24677

• February Trading:

  • Price crosses 24892 on June 06 → Long Entry

  • SL: 24677 (Monthly Low)

  • Target: 400 (1:2 RR)

Example 2: Bank Nifty (Hypothetical 2025 Scenario)

• March Expiry (29th May 2025)

  • High: 55782

  • Low: 55096

• April Trading:

  • Price breaks 555782 on June 02 → Long Entry

  • SL: 55096

  • Target: 1400 Points

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4. Advanced Tactics for Better Entries

A) Confirmation Filters

• Wait for closing price beyond the level (not just intraday break)

• Add volume confirmation (breakout with high volume is stronger)

B) Multiple Timeframe Alignment

• Check if weekly/daily charts also show breakout

• Example: Monthly high breakout + weekly close above = Strong signal

C) Option Strategies for Breakouts

• Long Breakout: Buy ATM Call + Sell OTM Call (Debit Spread)

• Short Breakout: Buy ATM Put + Sell OTM Put

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5. Risk Management Essentials

Position Sizing

• Never risk more than 1-2% capital per trade

• Example: If SL is 200 points in Nifty, trade 1 lot per ₹1 lakh capital

Stop Loss Rules

• Hard SL at opposite monthly level

• Trail SL to breakeven after 1:1 reward

Avoid These Mistakes

• ❌ Trading without waiting for confirmation

• ❌ Widening SL beyond monthly range

• ❌ Overtrading during consolidation

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6. Backtested Performance (Hypothetical 2024 Data)

Note: Past performance not indicative of future results

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7. Psychological Discipline Required

• Requires patience (only 1-2 trades/month)

• Must follow rules mechanically

• Accept that some months will be non-trending

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Conclusion: Your Monthly Trading Blueprint

1. Mark monthly expiry high/low immediately after expiry

2. Next month, trade only confirmed breakouts

3. Use proper risk management (1:2 RR minimum)

4. Combine with options for leveraged returns

This simple yet powerful method helps traders avoid noise and focus only on high-probability institutional moves.

Pro Tip: Maintain a trading journal tracking every monthly breakout for continuous improvement.