Trade Stock Indices

Trading System Guidelines: Write Down The Rules and Follow Them

We shall use the 1 hour chart to write the rules of this strategy - trading system.

A system means having rules that you follow to handle your trades. These rules need to be written down to help you. This trading course will show you how to write the rules for your trading system.

Key trading rules form the backbone of any index trading system. Without adhering to these rules outlined in your plan, there is no functional trading system in place.

Explanation of System below:

Trade Trading System Guidelines: Write Down The Trading Rules & Follow Them - Index Trade Strategy Guide Tutorial

Writing Down Guidelines of a Index System - 1 hour Trading Chart Timeframe

You can create the above trading system using the steps outlined:

Step 1:

Choose your Chart Time-frame - 1 hour chart

Step 2:

Choose Indicators which identify a new trend - Moving Average(MA) Cross-over System.

Step 3:

Select Indicators which confirm the trend - RSI, Stochastic

Step 4:

Finding entry and exit points

Long Entry

  1. Both Moving Average pointing up
  2. RSI above 50
  3. Stochastic oscillator going upwards

Short Entry

  1. Both Moving Average pointing down
  2. RSI is below 50
  3. Stochastic oscillator going downwards

Exit

  1. MA generates in the opposite trend signal
  2. RSI generates in the opposite market trend signal

Step 5:

Calculating risks in each trade - 20 pips

Step 6:

Write down the trading system Index rules

Step 7:

Test the trading system on a practice demo account

After using the steps we create and make written trading system rules below.

Writing System Rules

Trade Method Rules: Write The Trading Rules & Follow Them - Index System Tutorial

Example of How Do You Write the Best System Rules

This trading strategy produces the trade signals like shown below. Using these rules, traders can determine and assess when to enter and exit Index trades.

Trade Strategy Guidelines: Write Down The Trading Rules & Follow Them - Trade System Tutorial

Generate Buy & Sell Trading Signals using Written Stock Index System Rules

We finished the trade rules section. If you want to build a top index system, this guide starts you off right. It teaches how to set one up. This fits into a full plan. To learn a complete stock index plan, check the menu on the right under key index ideas. Find the trade plan link there. For forex plans, see the indices section.

More Topics and Tutorials:

Stock Indices Broker