Indices Strategy Rules: Write Down The Rules & Follow Them

We shall use the previous steps to create a written system that generates the trade signals displayed below using the 1 hour chart. We shall use the 1 hour chart to write the guidelines of this strategy - trading system.

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

Keyword is a SET OF RULES which you must follow. If you do not follow the rules then you don't have a system. Trade systems must have rules which are written down within your plan.

Example of Trading System below:

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

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

Choose your Chart Timeframe - 1 hour chart

Choose Technical Indicators that spot a new trend - MA Crossover System.

Select Technical Indicators which confirm the trend - RSI, Stochastic

Finding entry & exit points

Long Entry

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

Short Entry

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

Exit

1. MA generates opposite signal
2. RSI generates opposite signal

Calculating risks in every trade - 20 pips

Write down the trade system Indices rules

Test the 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 signals as pictured below. Using these rules traders can determine when to enter and exit trade transactions.

Generate Buy & Sell Indices Signals using Written System Rules

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