Index Strategy Rules: Write Down The Rules and Follow Them

We shall use the previous steps to create a written and noted down system that generates the trade signals shown & displayed below using the 1 hour chart. We shall use the H1 chart to write the trade rules of this trading strategy - system.

A strategy refers to written set of written indices rules which you follow to manage your trades. These rules must be written down so as to guide you. The following tutorial will show and explain to you how to writedown the trade rules of your trade system.

Keyword is a SET OF RULES which you as a Stock Index trader must follow. If you don't follow the trade rules then you do--notdon't have a trading system. Trade systems must have rules which are written down within your plan.

Explanation of Trading System below:

Writing Rules of a Stock Indices Trade Strategy

Writing Down Rules of a Trading System - 1 hour Chart Time frame Trade

You can come up with the above system using steps shown below:

Step 1:

Choose your Time-frame - 1 hour chart

Step 2:

Choose Indicators which spot a new trend - MA Crossover System.

Step 3:

Select Indicators that confirm the market trend - RSI, Stochastic

Step 4:

Finding entry and exit points
Long Entry
Both Moving Average MA pointing up
RSI is above 50
Stochastic oscillator trading going up
Short Entry
Both Moving Average MA pointing down
RSI is below 50
Stochastic oscillator going down
Exit
MA generates in the opposite market trend signal
RSI generates in the opposite trend signal

Step 5:

Calculating the risks in every trade - 20 pips

Step 6:

Write down the trade system Indices rules

Step 7:

Test the trading system on a practice account

After following these guidelines we develop written indices system rules below.

Writing System Indices Rules

Example of How to Write the Best System Rules

This system produces the trade signals as pictured below. Using these trading rules, traders can determine when to enter and exit trade positions.

Generate Buy & Sell Indices Signals using Written Stock Indices Strategy Trade Rules

Generate Buy & Sell Indices Signals using Written System Rules

We have finished writing the guidelines, if you're researching on how to create the best system, this tutorial is a good begin to lesson you on how to do just that. This is one part of a indices plan. Now how do you as a trader develop a complete indices plan? To read about Indices plan course go to the right navigating menu of this website under the key concepts where you as a stock indices trader can find a link for this plan topic.

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Trade Stock Indices

Index Strategy Rules: Write Down The Rules and Follow Them

Explanation of Trading System below:

Long Entry

Short Entry

Exit

Writing System Indices Rules