20 Pips Price Range Moving Average Stock Index Trading Strategy

The 20 pips price range moving average Stock Indices trading strategy is used with the 1 Hour Stock Indices chart and 15 minute Stock Indices chart. On this Stock Indices chart time-frames we use the 100 and 200 simple moving average Stock Indices technical indicator.

Both the 1 Hour and 15 minute Stock Indices chart time-frames will use the 100 and 200 SMA (SMA Indicator) to determine the direction of the market trend.

The 1 Hour Stock Indices chart time frame checks the long term direction of the market trend, upward or downward 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 chart to find the optimal point to enter Stock Indices trades. Stock Indices trades are opened only when the price is within 20 pips range of the 200 simple MA, if price is not within this pip range Stock Indices trades are not opened.

Buy Signal - Stock Indices Uptrend/Bullish Market

To generate buy (bullish Stock Indices trading signals) using the 20 pips moving average Stock Indices strategy, we shall use the 1hour and 15 minute Stock Indices chart time-frame.

On the 1 hour Stock Indices chart time frame the price of the Stock Indices chart should be above both the 100 and 200 simple moving average. We then move to a lower Stock Indices chart time-frame, the 15 minute chart time frame to generate a Stock Indices trade signal.

On 15 minute Stock Indices chart time-frame, when price reaches the 20 pips range above the 200 SMA, we open a buy Stock Indices 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 Indices 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 and 200 Simple Moving Average Stock Indices Trading Buy Signal - Moving Average Stock Indices Strategy

Sell Signal - Stock Indices Downtrend/Bearish Market

To generate sell (short Stock Indices trading signals) using the 20 pips moving average Stock Indices strategy, we shall also use the 1 hour Stock Indices chart time frame and 15 minute Stock Indices chart time-frame.

On the 1 hour Stock Indices chart time-frame, the price should be below both the 100 and 200 SMA. We then move to the 15 minute Stock Indices chart time frame to generate a Stock Indices trading Signal.

On 15 minute Stock Indices 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 and 200 Simple Moving Average Stock Indices Trading Sell Signal - Moving Average Stock Indices Strategy

With this Stock Indices trading strategy method price will generally bounce of these support and resistance levels because many Stock Indices traders watch these levels, and open similar Stock Indices trades at around the same point.

These support and resistance levels act as short term resistance or support levels within the Stock Indices price charts.

Profit Taking level For This Stock Index 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 Indices trading profit taking level would therefore be considered to be 60 to 70 pips from the 200 SMA.