Example Templates
When making your own indices system, there are a few things to keep in mind. Your strategy needs to have the ability to identify new Indices market trends, while at the same time making sure you do not to get faked out/whipsaws. The real trick is, once you have created a system which 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've to figure-out what strategy works for you. It's good to know in what chart timeframe you are going to be working in, & how much you're willing to risk once you start trading online. All these should be factored in, & should be written down within your indices plan. A nice place to test this plan would be on free demo 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 system" or the "best system"?
To come up with a good trading strategy the first thing to do is to define your objective or goal:
The following examples illustrates a goal and explains the guidelines of how to achieve that goal
Stock Indices Trading Goals
1.Identify a new trend
Moving average crossover method trading strategy is most oftenly used strategy to identify a new trend. Time to open a long or short trade is determined 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
Best type of a method is one that is indicator-based. You will 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 system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry & exit signals.
- Proper Indices Money Management Guidelines
Accomplishing these 4 aims will result in a profitable strategy that works.
The last piece of info needed, is deciding how aggressive you are going to be when entering & exiting a trade. Those traders that are more aggressive wouldn't wait until the chart candlestick closes and would enter as soon as their indicators match up. But most traders would wait until the chart candlestick of the chart time frame they are using has closed, to have more stable signal when entering the market.
To get profits out of market you need to create your own profitable system: a technique that will generate profitable signals. You need to have your own strategy which will help you achieve your financial goals. Sometimes the best systems are the ones that you build on your own. No need to keep looking for best systems or for systems which work, this web site provides you with all the tools required to help you and guide you on how to create your own systems.
Illustrated Below is an example of a trading system depending on RSI, MACD & Stochastic.
Indices System - Best MT4 Examples Trading Strategies
The system example above is comprised of four technical indicators in total, all of these generate trade signals using different techniques, the moving average will generate signals using the moving average crossover method shown, the RSI indicator, Stochastic indicator and MACD indicator use different technical analysis to generate the long & short signals as pictured in the above example. How to generate these signals is discussed in next topic (on sidebar navigation learn tutorials menu under key concepts).
For new traders, it is difficult for them to create their own trading strategies since they do not have a lot of knowledge about the market. However, this learn indices website will explain how a beginner trader can create their own free system in just seven easy guidelines. Best strategy is the one you come up with yourself & learn how to trade the market with it.
Main benefit of developing your own free systems is that you will know how to make profits by yourself - & not rely on other peoples efforts.
In the next indices course located at the sidebar navigation learn lessons menu below the indices key concepts will show to you how to create a system like that one above, write it's indices rules & how to back test the system on a practice practice account before using it on live account.
4 Examples of Free Trading Strategies
Example 1: The MA Crossover Strategy
The moving average indicator cross over method uses two moving averages to generate signals. First Moving average uses a shorter period & the second is a longer period.
MA Crossover Technique - Moving Average Crossover Strategy
This above method is referred to as the moving average crossover method because stock signals get generated when 2 averages cross above or below each other.
Trading System Example Template - Short and Long signal Generated by Trading System
A buy signal or going long trade is generated when the shorter moving average indicator crosses above longer moving average indicator (Both Moving Averages Going Up).
A sell signal or a going short trade is generated when the shorter average indicator crosses below longer moving average indicator (Both Moving Averages Moving Down).
Example 2: Stochastics Trading System
Stochastic Oscillator technical indicator can be combined with other indicators to form a system.
- RSI indicator
- MACD indicator
- Moving Averages indicators
Trading Strategies Examples - Best MetaTrader 4 Templates Example Systems
Short Signal or Sell Trading Signal
How the short sell Stock Indices signal was generated
From our trading guide-lines the short signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic moving downward
- MACD heading downwards below centerline
The short signal was generated when all the written indices rules were met. The exit signal is generated when a signal in opposite trade direction is generated.
Good thing about using such a method is that we are using different types of indicators to confirm the signals & avoid as many whipsaws as possible in process.
- Stochastic -indices momentum indicator
- RSI -indices momentum indicator
- Moving Averages -trend following indicator
- MACD -trend following oscillator
Based on the chart timeframe used - this strategy can be used as scalping system when the minute 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 indices plan tutorial on this learn indices website under the key concepts section located on the right navigation menu.
Chart Time Frame
1 H chart
Trading Indicators that spot a new trend
MA Crossover Trading Indicators Strategy
Trading Indicators which confirm the trend
RSI indicator
STOCHASTIC OSCILLATOR indicator
Long Entry - Buy Signal
1. Both Moving Average(moving averages) moving upwards
2. RSI above 50
3. Both stochastics oscillators moving up
Short Entry - Sell Signal
1. Both Moving Average pointing down
2. RSI below 50
3. Both stochastics oscillators moving down
Exit Signal
1. Moving Average Indicator gives opposite signal
2. RSI gives opposite signal
Risk Management in Stock Indices Trading
Stop Loss - 35 pips
Take Profit Order - 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Trading Chartist Plan
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete strategy commonly referred to as the - "New Gann Swing Chartist Plan". Within this methodology the Gann Swing Oscillator is used to help determine market swings for trading only within the current market trend is shown by the Gann Trend.
Shown Below is examples of New Gann Swing Chartist Plan
Gann Chartist Plan - Indices Systems - MT4 Template Trading System
