Learn Indices Trading Strategies
Before coming up with a indices trading plan a trader must learn about the various indices trading strategies that they can sue to trade indices. Coming up with the right indices trading strategy can increase your chances of becoming more successful in stock indices trading.
For traders who want to learn about indices trading strategies there are 50 indices trading strategies listed in the indices trading strategies section of this strategy. This strategy section also shows traders how combine these strategies to create a stock indices trading system. The indices trading is a set of rules that will be used by stock indices traders to generate trading signals. For example the indices trading system rules will specify how two or more indicators will be used together to generate a buy or a sell indices trade signal.
As a trader the strategy you choose should be applied in your trading once you decide what type of trader you are & what type of trading method you will be using to analyze the stock indices trading market moves.
For examples you may decide you want to be a scalper you will use your scalping strategy and only open traders for a few minutes. If you're a indices trend trader you will use your trading strategy after you've decided the indices trend of the stock indices trading market. If the indices trend is upwards you will use your indices trading strategy to open buy stock indices trades.
If you are a day trade you will use your trading strategy to open trades that will only be opened for a few hours. Your trades should all be closed during the day and you'll not hold your trades overnight. As for the trading method which may be that of indices trend following you will first draw indices trend lines on the stock indices chart to determine the overall market indices trend & after that you will then apply your trading strategy to open stock indices trades.
In technical analysis there are various techniques used to trade indices which a trader might use to ascertain which of these techniques of trading they will be using when trading the stock indices market. After choose in their trading method traders will then apply their indices trading strategy to open stock indices trades.
Types of Indices Trading Methods
There are two general methods of trading the stock indices trading market, these are:
1.Indices Trend Trading
2.Range Trading
Indices Trend Trading
In this method a trader will first of all determine the overall market indices trend before applying their indices trading strategy to open stock indices trades.
To determine the indices trend - this can either be an upward indices trend or a downwards trend.
A trader may use indices trend lines or moving averages to determine the overall market trend. After determining the stock indices trading market indices trend then the trader can use their indices trading strategy to open stock indices trades.
For example a trader may determine that the stock indices trading market indices trend is upward by using moving averages. The trader may then use a stock indices indicator such as Bollinger bands and open trades once the stock indices trading price retraces to the lower Bollinger band because this lower band will act as the support level of indices trading price. Therefore the trading strategy that the trader will be using is the strategy of resistance and support levels and the trader will be using Bollinger bands to determine these points and open and close trades based on these points.
Range Trading
Range trading is a method of trading indices that move within a particular band of indices trading prices and only oscillates between these two points without moving much outside these two points.
A trader will then use the strategy of support and resistance to determine which levels to open buy or sell stock indices trades. The trader will draw a support line and a resistance line. The support level will be used to open buy stock indices trades and the resistance level will be used to open sell stock indices trades.
The most popular technique between these 2 is the indices trend trading method. Traders should always try to trade with the indices trend trading method as this technique is the most reliable technique when it comes to trading indices. Even though sometimes the stock indices trading market will be trending and at other times the stock indices trading market will be moving in a range when the stock indices trading market is consolidating traders should try to trade the stock indices trading market only when there is a trend. After determining the indices trend traders will then use their indices trading strategy to determine when to open buy or sell stock indices trades that are in direction of the overall market trend.
Once you have decided what type of trader you are: scalper, day trader or swing trader you should then come with the following:
1.Trading Method
2.Trading Strategy
After coming up with this 2 you will then combine these 2 & use these to detect when to buy or close trades.
You can then practice trading on the practice account so as to determine profitability of your method & trading strategy. You'll then use the results to improve the profitability of your method and strategy & once you have gained experience to trade with these 2 you can then open an account & start trading the live stock indices market.
