4 Example Templates of Stock Strategies

When creating your own indices trading system, there are a few things to keep in mind. Your strategy needs to be able to identify new Indices market trends, while at the same time making sure you do not to get faked out -indices trading whipsaws. The real trick is, once you've created a system that works for you, stick to it. Being disciplined will help you a lot in becoming successful in stock indices trading.

Before trading Indices on a live account, you have to figure out what strategy works for you. It's good to know in what chart time frame you are going to be working in, and how much you're willing to risk once you begin trading. All these factors should be factored in, & should be written down within your indices trading plan. A good place to test this trading plan would be on a free practice account. This is where you test your strategies risk free without investing money to determine which strategy is best suited for you.

So, now how can a trader like you create a "good indices trading system" or the "best system"?

To come up with the best trading strategy the first thing to do is to define your trading objective or goal:

The following examples shows a goal and explains the indices guide-lines of how to achieve that goal

Goals of System

1.Identify a new trend

Moving average crossover strategy trading strategy is most oftenly used strategy to identify a new trend. The time to open a long or short trade is decided when 2 moving averages indicators cross over or cross under each other.

2.Confirm the new trend

Relative Strength Index(RSI) Indicator & Stochastic Oscillator Indicator are the most commonly used technical indicators to confirm a trend.

Indicator based System

The best type of a trading strategy is one that is indicator-based. You'll find it straight forward to generate the signals & thus less error-prone on your part & this will help you to avoid market whipsaws.

There are several things we want to achieve when creating a trading system:

1. Find entry points as early as possible.
2. Find exit points securing maximum gains.
3. Avoid fake entry and exit signals.
4. Proper Stock Money Management Guidelines

Finishing these 4 goals will result in a profitable strategy that works.

The last piece of info needed, is deciding how aggressive you're going to be when entering & exiting a trade. Those traders who are more aggressive wouldn't wait until the chart candle stick closes and would enter as soon as their indicators match up. But most traders would wait until the chart candle of the chart time frame they are using has closed, to have more stability when entering a the market.

To get profits out of the trading market you need to build your own profitable trading system: a trading strategy that will generate profitable trading signals. You need to have your own strategy that will help you achieve your financial goals. Sometimes the best systems are the ones that you build on your own. No need to keep searching online for best systems or for trading systems which work, this site provides you with all the trading tools required to help you and tutorial you on how to come up with your own systems.

Shown Below is example of a trade system based on RSI, MACD & Stochastic.

Indices System - Meta Trader 4 Chart Templates Strategies

The trading system example above is comprised of four indicators in total, all of these generate trade signals using different strategies, the moving average will generate stock signals using the MA cross-over strategy shown, the RSI indicator, Stochastic indicator and MACD indicator use different technical analysis to generate the long & short signals as shown in the above example. How to generate these trading signals is discussed in the next topic (on the sidebar navigation learn tutorials menu under key concepts).

For new traders, it is difficult for them to create their own indices strategies since they don't have a lot of knowledge about the market. However, this learn trading site will explain how a beginner trader can create their own free system in just seven easy steps. The best strategy is one you come up with yourself and learn how to trade the trading market with it.

The main advantage of creating your own free systems is that you will know how to make profits by yourself - and not rely on other peoples efforts.

In the next lesson located at the sidebar navigation learn lessons menu below the indices trading key concepts will show you how to create a trading system like the one above, write it's indices trading rules and how to back-test the system on a practice demo account before using it on a live account.

4 Examples of Free Strategies

Example 1: The Moving Average Cross Over Strategy

The moving average indicator cross over strategy uses two moving averages to generate signals. The first Moving average uses a shorter period and the second is a longer period.

Moving Average Cross Over Indices Method - Moving Average Cross Over Strategy

This above indices trading strategy is referred to as the moving average cross over strategy because signals get generated when 2 averages cross above or below each other.

Trading System Example Template - Short & Long signal Generated by System

A buy signal or going long trade is generated when shorter moving average indicator crosses above longer moving average indicator (Both MAs Moving Up).

A sell stock indices signal or a going short trade is generated when shorter average indicator crosses below the longer moving average indicator (Both Moving Averages Moving Down).

Example 2: Stochastics Stock System

Stochastic Oscillator indicator can be combined with other indicators to form a system.

• RSI indicator
• MACD indicator
• Moving Averages stock indicators

Strategies Trading Example - Meta Trader 4 Chart Templates Strategies

Short Signal or Sell Signal

How the short sell signal was generated

From our indices guide-lines the short signal is generated when:

1. Both Moving Averages are heading down
2. RSI is below 50
3. Stochastic moving downward
4. MACD moving downwards below centerline

The short trading signal was generated when all the written trading rules were met. Exit signal is generated when a trade signal in opposite direction is generated.

Good thing about using such a trading strategy is that we are using different types of indicators to confirm the signals and avoid as many whipsaws as possible in process.

• Stochastic -indices trading momentum oscillator indicator
• RSI -indices trading momentum oscillator indicator
• Moving Averages -trend following indicator
• MACD -trend following oscillator

Based on the chart time frame used - this strategy can be used as scalping system when the minute stock charts are used or as a Indices day system when hourly charts are used.

Example 3: System Example

This system is fully described within the trade plan on the trade plan lesson on this learn site under the Indices key concepts section located on right navigation menu.

Chart Time Frame

1 H chart

Indicators that identify a new trend

Moving Average Cross Over Technical Indicators Strategy

Indicators which confirm the trend

RSI indicator

STOCHASTIC OSCILLATOR indicator

Long Entry - Buy Signal

1. Both MA(moving averages) pointing up

2. RSI above 50

3. Both stochastics going up

Short Entry - Sell Signal

1. Both MA pointing down

2. RSI below 50

3. Both stochastics going down

Exit Signal

1. Moving Average Indicator gives opposite signal

2. RSI gives opposite signal

Money Management in Indices Trading

Stop Loss - 35 pips

Take Profit Order - 70 pips

Reward to Risk 2:1

MT4 Chart Templates Strategies

The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete trading strategy commonly referred to as the - 'New Gann Swing Chartist Plan'. Within this strategy the Gann Swing Oscillator is used to help ascertain stock market swings for trading only within the current trend is shown by the Gann Trend.

Shown Below is examples of New Gann Swing Chartist Plan

Gann Chartist Plan - MT4 Chart Template System