Trade Stock Indices

Learn Stock Indices Trading

How to Trade a Downtrend?


Down Indices trend is when the stock indexes price of a stock indices chart is moving lower and lower. Indices Trading indices prices generally close lower than where they opened.



How to Trade Downward Indices Trend: Indices traders use the downward indices trend direction to open sell indices trades



Drawing a Downward Indices Trend Line

When it comes to learning how to draw a downward indices trend line, you need to know that when the stock indexes trading market is bearish it forms lower lows and lower highs forming a downward general indices trend direction - downwards indices trend. These are the points that are used to draw a downward indices trend line.


To draw downward indices trend setup we use resistance levels and to do it correctly two resistance levels are needed. When stock indexes price touches this downward indices trend line, then we open sell stock indexes trades and place stop loss just a few pips above the sloping resistances;

How to Trade a Downtrend?

How to Trade a Downtrend? - Strategy for Trading a Indices Downward Trend


Trading This Down Indices Trend Market Move

When trading with this down indices trend method, this downward indices trend setup will show the general direction of the stock indexes trading market as downwards therefore indices traders will only open short sell stock indexes trades. These resistance levels are the levels where if stock indexes price retraces then these points will provide strong resistance. This is why many indices sellers will wait until stock indexes price retraces upwards and hits these retracements levels to open sell stock indexes trades. Trades opened at these levels have a high Reward to Risk Ratio and have little drawdown.


For Example, in the above downwards indices trend example, a indices trader would have opened short sell indices trading signals at the resistance 1, resistance 2, resistance 3 and these sell stock indexes trades would have been opened with minimum amount of draw-down/retracement.



How to Draw a Downward Indices Trading Channel

A downwards indices channel is drawn by drawing a line that is parallel to the downward indices trend line and then adjusting it to touch the bottom boundary of the stock indexes price movement. This then forms a channel and as long as the stock indexes price stays between these two channels the general market down indices trend direction is intact the stock indexes trading market direction will continue being bearish.

How to Draw a Downward Indices Trading Channel

How to Draw a Downward Indices Trading Channel - Indices Trading Downward Indices Trend Trading Strategy


Trading The Downward Indices Trading Channel

The downward indices channel is used by stock indexes traders to show levels where it best to take profits. Indices traders will take some profit once the stock indexes price touches the lower channel or the lower channel and wait for another retracement before opening a short sell indices trade again.

 

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