Creating Basics Indices Trading Systems That Works
When creating your own Basics Indices Trading Systems, there are a few things to keep in mind. Your strategy needs to be able to identify new Indices market trends, while at the same time making sure you don't to get faked out/whipsaws. The real trick is, once you have created a indices trading system that works for you, stick to it. Being disciplined will help you a lot in becoming successful.
Before trading Indices on a live indices trading account, you have to figure out what Basics Indices Systems & strategies work for you. It is good to know in what time frame you are going to be working in, and how much you are willing to risk once you begin. All these factors should be factored in, and should be written down within your indices trading plan. A good place to test this would be on a free practice trading account. This is where you test your strategies risk free without investing money to determine which strategy is best suited for you.
So, now how can a trader like you come up with a "good Basics Indices Systems" or "best Basics Indices Trading Systems "?
To come up with a good trading strategy the first thing to do is to define your main objective or goal:
The following example illustrates a goal & explains the rules of how to achieve that goal for your Basics Indices Trading System.
Indices Trading Goals
1.Identify a new indices trend
Moving average crossover method is the most oftenly strategy used to identify a new trend. The time to open a long or short trade is decided when 2 averages cross over or cross under each other.
2.Confirm the new indices trend
Relative Strength Index(RSI) and Stochastic Oscillator Indicator are the most oftenly used indicators to confirm a Indices trend.
Indicator-based Basics Indices Trading Systems
The best type of a trading method is one that is indicator-based. You will find it straight forward to generate the trading signals & thus less error-prone on your part & this will help you to avoid market whipsaws.
There are several things we want to achieve when creating Basics Indices Trading Systems :
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry and exit signals.
- Proper Indices Trading Money Management Guidelines
Accomplishing these four goals will result in a profitable Basics Indices Trading System & a strategy that works.
The last piece of information needed, is deciding how aggressive you are going to be when entering and exiting a trade. Those who more aggressive wouldn't wait until the chart candle stick closes & would enter as soon as their indicators match up. But most would wait until the chart candlestick of the timeframe they are using has closed, to have more stability when entering a the stock indices trading market.
To get huge profits out of the stock indices trading market you need to build your own profitable trading system; a method that will bring your not just hundreds but thousands of dollars worth of revenues. You need to have your own strategy that will help you achieve your financial goals. Sometimes the best trading systems are the ones that you build on your own. No need to keep searching online for best indices trading systems or for indices trading systems which work, this site provides you with all the tools required to help you and guide you on how to come up with your own indices trading systems.
Shown Below is example of a Basics Indices Trading Systems based on RSI, MACD & Stochastic.
Indices System - Basics Indices Trading Systems
The Basics Indices Trading Systems example above is comprised of four technical indicators in total, all of these generate Indices trade signals using different methods, the moving average will generate signals using the crossover method shown, the RSI, Stochastic and MACD use different analysis to generate the long and short signals as shown in the above example. How to generate these trading signals is discussed in the next topic (on the sidebar navigation learn tutorials menu under key concepts).
For beginners who want to create Basics Indices Trading Systems , it's difficult for them to device their own indices trading strategies since they don't have a lot of knowledge about the stock indices trading market. However, this site will explain how one-can create their own free indices trading system in just seven easy steps. The best strategy is one you come up with yourself and learn how to trade the stock indices trading market with it.
Main advantage of creating your own free Basics Indices Trading Systems is that you will know how to make profits by yourself-and not rely on other peoples efforts.
In the next course located at the sidebar navigation learn lessons menu below the key concepts will show you how to create a indices trading system like the one above, write it's rules and how to back test it on a practice demo stock indices trading account before using it on a live stock indices trading account.
4 Examples of Free Basics Indices Trading Systems
Example 1: The Moving Average Crossover Technique - Basics Indices Trading Systems
The cross over method uses two moving averages to generate indices trading signals. The first Moving Average uses a shorter period and the second is a longer period.
Crossover Technique - Basics Indices Trading Systems
This above technique is referred to as the moving average cross over technique because trading signals are generated when 2 averages cross above or below each other.
Indices Trading System Trading Example - Short and Long signal Generated - Basics Indices Trading Systems
A buy stock indices signal or going long trade is generated when the shorter average crosses above the longer average (Both Moving Averages Going Up).
A sell stock indices signal or a going short trade is generated when the shorter average crosses below the longer average (Both Moving Averages Going Down).
Example 2: Stochastics Stock Indices Trading System
Stochastic Oscillator can be combined with other indicators to form a system.
- RSI
- MACD
- Moving Averages Indices Trading Technical Indicator
Trading Systems Example - Basics Indices Trading Systems
Short Signal or Sell Indices Signal - Basics Indices Trading Systems
How the short signal was generated
From our rules the short signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic moving downward
- MACD moving downwards below centerline
Short signal was generated when all the written trading rules were met. The exit signal is generated when a signal in opposite direction is generated.
Good thing about using such a technique is that we are using different types of indicators to confirm the signals & avoid as many whipsaws as possible in the process.
- Stochastic - momentum oscillator
- RSI - momentum oscillator
- Moving Averages -indices trend following indicator
- MACD -indices trend following oscillator
Based on the chart timeframe used this strategy can be used as Indices scalping system when the minute charts are used or as a Indices day indices trading system when hourly charts are used.
Example 3: Trading System Stock Indices Example
This system is fully described within the indices trading plan on the indices trading plan lesson on this site under the key concepts section located on the right navigation menu.
Chart Timeframe
1 hour chart
Technical Indicators which spot a new trend
Moving Average Crossover
Indicators that confirm the market trend
RSI
STOCHASTIC OSCILLATOR
Long Entry - Buy Signal
1. Both MA(moving averages) pointing up
2. RSI above 50
3. Both stochastics going up
Short Entry - Sell Signal
1. Both Moving Average pointing down
2. RSI below 50
3. Both stochastics going down
Exit Signal
1. Moving Average gives opposite trading signal
2. RSI gives opposite signal
Risk Management in Indices Trading
Stop Loss - 35 pips
Take Profit Indices Order - 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Stock Indices Trading Chartist Plan
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete indices trading strategy commonly referred to as the - 'New Gann Swing Chartist Plan'. Within this technique the Gann Swing Oscillator is used to help determine market swings for trading only within the current market indices trend is illustrated by the Gann Trend.
Shown Below is examples of New Gann Swing Chartist Plan
Gann Chartist Plan - Basics Indices Trading Systems
