Example Templates
When making your own indices system, there are a couple of things to keep in mind. Your trading strategy needs to have the ability to identify new Stock Index market trends, while at the same time making sure you don't to get faked out/whipsaws. The real trick is, once you've created a trade system which works for you, stick to it. Being disciplined will help you as a trader a lot in becoming successful in indices trading.
Before trading Indices on a real account, you have to determine what strategy works for you. It's good to know in what chart time frame you are going to be working in, & how much you are willing to risk once you start trading online. All these should be factored in, & should be written within your indices plan. A nice place which to test this plan would be on free demo account. This is where you test out your trade strategies risk-free without investing/depositing money to determine which trading strategy is best fitted for you.
So, now how can a stock indices trader like you create a "good trading system" or "best system"?
To come up with a good strategy the first thing to do is to define your objective or goal:
The following examples illustrates a goal & explains the trade rules of how to achieve that objective
Stock Index Trade Goals
1.Identify a new trend
Moving average crossover method trading strategy is most oftenly used strategy to identify a new trend. Time to open a long or short trade is determined when 2 moving averages indicators cross over or cross under each other.
2.Confirm the new trend
Relative Strength Index(RSI) Indicator & Stochastic Oscillator Trading Indicator are the most often used technical indicators to confirm a trend.
Indicator based System
Best type of a method is one that is indicator-based. You will find it straight forward to generate the trade signals & thus less error-prone on your part & this will help you as a trader to avoid market whipsaw signals.
There are several things we want to achieve when creating a trading system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry & exit trading signals.
- Proper Index Capital Management Guidelines
Accomplishing these 4 aims will result in a profitable trade strategy which works.
The last piece of information needed, is deciding how aggressive you're going to be when entering & exiting a trade. Those traders that are more aggressive wouldn't wait until the chart candlestick closes and would enter as soon as their trading indicators match up. But many stock indices traders would wait until the chart candle of the time-frame they are using has closed, to have more stable trading signal when entering the market.
To get profits out of the market you need to develop your own profitable system: a technique that will generate profitable trading signals. You need to have your own trading strategy that will help you as a trader achieve your financial goals. Sometimes the best systems are the ones which you build on your own. No need to keep looking for the best systems or for systems which work, this website provides you with all the trading tools required to help you as a trader and guide you on how to create your own trading systems.
Illustrated Below is an example illustration of a trading system depending on RSI, MACD and Stochastic.
Index System - Best MetaTrader 4 Examples Trading Strategies
The system example above is comprised of four technical indicators in total, all of these generate trade signals using various techniques, the Moving Average MA will generate trade signals using the moving average crossover method shown, the RSI, Stochastic indicator and MACD indicator use different trading analysis to generate the long & short signals such as displayed and shown in the above example. How to generate these trade signals is discussed in next topic (on sidebar navigation learn tutorials menu under key concepts).
For new traders, it's difficult for them to create their own trading strategies since they do not have a lot of knowledge about the market. However, this learn indices website will explain how a beginner trader can create their own free system in just seven easy guidelines. Best strategy is the one you come up with yourself & learn how to trade the market with it.
Main benefit of developing your own free trading systems is that you'll know how to make profits by yourself - & not rely on other peoples efforts.
In the next indices course located on the sidebar navigation learn lessons menu below the indices key concepts will show to you how to create a trade system like the one above, write it's indices rules & how to back test the trading system on a practice practice trade account before using it on live account.
4 Explanation Examples of Free Trading Strategies
Example 1: The Moving Average Cross over Strategy
Moving average trading indicator cross over trading strategy uses two moving averages to generate signals. First Moving average uses a shorter period and the second is a longer period.
MA Crossover Technique - Moving Average Crossover Strategy
This above method is referred to as the moving average crossover method because stock signals get generated/derived when 2 averages cross above/below each other.
Trading System Example Template - Short & Long signal Generated by Trading System
A buy trade signal or going long trade is derived/generated when the shorter moving average indicator crosses above longer moving average indicator (Both MAs Moving Averages Going and Heading Up).
A sell signal or a going short trade gets generated when shorter average indicator crosses below longer moving average indicator (Both MAs Moving Averages Moving Down).
Example 2: Stochastics Trading System
Stochastic Oscillator Technical technical indicator can be combined with other technical indicators to make a trading system.
- RSI indicator
- MACD indicator
- MAs trading indicators
Trading Strategies Examples - Best MetaTrader 4 Templates Example Systems
Short Signal or Sell Trading Signal
How the short sell Index signal was generated
From our trading guide-lines the short signal is generated when:
- Both MAs Moving Averages are heading down
- RSI is below 50
- Stochastic moving downwards
- MACD heading downward below center line
The short signal was generated when all the written indices rules were met. The exit trading signal is derived and generated when a trade signal in the in the opposite market trend trend trend trend trend trend trend trade direction is generated.
The good thing about using such a method is that we're using different types of indicators to confirm the trade signals & avoid as many whipsaws as possible in process.
- Stochastic - indices momentum trading indicator
- RSI - indices momentum indicator
- Moving Averages -trend following trading indicator
- MACD -trend following oscillator indicator
Based on the chart time frame used - this trading strategy can be used as scalping system when the minute trading charts are used or as a Indices day system when hourly trading charts are used.
Example 3: System Example
This system is fully described within the trade plan on the indices plan tutorial on this learn indices website under the key concepts section located on the right navigating menu.
Chart Time-Frame
1 Hour chart
Trading Indicators that spot a new trend
MA Crossover Indicators Strategy
Trading Indicators that confirm the trend
RSI
STOCHASTIC OSCILLATOR indicator
Long Entry - Buy Trade Signal
1. Both Moving Average(moving averages) moving upwards
2. RSI value is above 50
3. Both stochastic oscillators indicators moving up
Short Entry - Sell Trade Signal
1. Both Moving Average MA pointing down
2. RSI is below 50
3. Both stochastic oscillators trading heading down
Exit Signal
1. Moving Average Indicator generates in the in the opposite market trend trend trend trend trend trend trend signal
2. RSI generates in the in the opposite market trend trend trend trend trend trend trend signal
Equity Management in Stock Indices
Stop Loss Order - 35 pips
Take-Profit - 70 pips
Reward : Risk 2:1
Example 4: New Gann Swing Trading Chartist Plan
The Gann Swing Oscillator Indicator is meant to be used in combination together with the Gann HiLo Activator and Gann Trend to form a complete strategy commonly referred to as the - "New Gann Swing Chartist Trading Plan". Within this technique the Gann Swing Oscillator is used to help identify market swings for trading only within the current market trend is illustrated by the Gann Trend.
Displayed Below is examples of New Gann Swing Chartist Trading Plan
Gann Chartist Plan - Indices Systems - MT4 Template Trade System
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