20 Pips Price Range Moving Average Stock Indices Trading Strategy
The 20 pips price range moving average Stock Indices trading strategy is used with the 1 Hour Indices trading chart & 15 minute Stock Indices trading chart. On this Stock Indices trading chart time-frames we use the 100 & 200 simple moving average Stock Indices technical indicator.
Both the 1 Hour & 15 minute Stock Indices trading chart time-frames will use the 100 & 200 SMA (SMA Indicator) to determine the direction of the market trend.
The 1 Hour Indices trading chart time frame checks the long term direction of the market trend, upwards or downwards trend, depending on the direction of the moving averages. All Stock Indices trades taken should be in this trend direction.
We then use the 15 minute Stock Indices trading chart to find the optimal point to enter Indices trades. Stock Index trades are opened only when the price is within 20 pips range of the 200 simple MA, if price isn't within this pip range Stock Indices trades are not opened.
Buy Signal - Stock Index Uptrend/Bullish Market
To generate buy (bullish Stock Index trading signals) using the 20 pips moving average Stock Indices strategy, we shall use the 1hour & 15 minute Stock Indices trading chart time-frame.
On the 1 hour Indices trading chart time frame the price of the Stock Indices trading chart should be above both the 100 & 200 simple moving average. We then move to a lower Indices trading chart time-frame, 15 minute chart time frame to generate a Stock Indices trade signal.
On 15 minute Stock Indices trading chart time-frame, when price reaches the 20 pips range above the 200 SMA, we open a buy Stock Index trade and place a stop loss 30 pips below the 200 SMA. Stop loss can be adjusted to the amount of Pips that are suitable for your risk but to avoid being stopped out by normal Stock Indices volatility its best to use 30 pips stop loss.
A buy Stock Index trade can also be opened when the Stock Indices price touches the 100 Simple moving average, provided it’s not very far from the 200 SMA. Normally the 100 SMA will be within the 20 pips range of the 200 SMA.
100 & 200 Simple Moving Average Stock Indices Trading Buy Signal - MA Moving Average Stock Indices Strategy
Sell Signal - Stock Index Downtrend/Bearish Market
To generate sell (short Stock Index trading signals) using the 20 pips moving average Stock Indices strategy, we shall also use the 1 hour Indices trading chart time frame and 15 minute Stock Indices trading chart time-frame.
On the 1 hour Indices trading chart time-frame, price should be below both the 100 & 200 SMA. We then move to the 15 minute Stock Indices trading chart time frame to generate a Stock Indices trading Signal.
On 15 minute Stock Indices trading chart, when price reaches the 20 pips range below the 200 SMA, we open a sell trade and place a stop loss 30 pips above the 200 simple moving average.
100 & 200 Simple Moving Average Stock Indices Trading Sell Signal - MA Moving Average Stock Indices Strategy
With this Stock Indices trading strategy method price will generally bounce of these support & resistance levels because many Stock Index traders watch these levels, & open similar Indices trades at around the same point.
These support & resistance levels act as short term resistance or support levels within the Stock Indices price charts.
Profit Taking level For This Stock Indices Trading Strategy
With this Stock Indices trading strategy the price will bounce and make a move in the direction of the original Stock Indices trend. This move will range from 60 - 70 pips.
The best Stock Index trading profit taking level would therefore be considered to be 60 to 70 pips from the 200 SMA.
