Learn Indices Trading Courses
Indices is one of the largest financial market in the world. Indices traders invest in the stock indices trading market popularly known as Indices for speculation purposes. Indices traders are attracted to indices trading because of the following reasons:
Indices Trading Leverage -indices trading leverage means that traders can make more money in indices trading by investing little of their own capital. This is because traders can borrow money to trade with from their indices broker using stock indices trading leverage.
Liquidity - The fact that indices trading is one of the biggest financial market in globe means that there are very many traders trading the stock indices trading market at any time of the day or night during the stock indices trading market week. The fact that there are many traders investing in this market make the stock indices trading market a very liquid market meaning trader can open and close trade in a matter of seconds.
Low Transaction Cost - Because in indices trading there are many traders trading at any one given time means that trade costs are lower because of this big volume of trades taking place in the stock indices trading market. The only transaction cost paid by the trader is the spreads; no other cost is paid by the traders. The spread is also only when a trader opens a trade: therefore if a trader does not trade then they do not pay any cost.
This learn indices trading tutorial presents the various indices trading education courses that technical traders or traders who want to learn technical analysis can learn from. After traders have learnt the basics of indices trading it is then time to learn more about technical analysis topics that they can use to trade with.
The stock indices technical analysis lessons can guide beginners on how to study the various technical analysis concepts.
Basics of Indices Technical Analysis
Candle Charts
For technical traders the basic technical analysis tool that they use is the stock indices chart. There are 3 types of indices charts: line stock indices charts, bar stock indices charts and candlestick stock indices charts. The type of stock indices chart most commonly used by traders is the candlestick stock indices chart. This is because the candlestick stock indices chart has a visually appealing format that clearly represents the movement of indices trading prices, by displaying different colors for different movements; that blue color when prices close higher than they opened or red color that represents when prices close lower than they open. In addition these candles show the distance between the open and close stock indices price and this forms the body of the candlestick. This body of the candlestick is looks similar to the wax part of a real candle. The highest point of the stock indices trading price will be drawn with what is known as a shadow, the shadow is a thin poking line that is drawn above the candlestick and it looks similar to the wick of a real candle. There is also another shadow drawn below the candlesticks and this one represents the lowest point of the indices trading price.
The information drawn by the candlesticks is known as OHCL - which represents Opening indices trading price, High, Low and Closing indices trading price.
Japanese candles were created in Japan by a traditional rice trader that used to trade futures, his name was Homma Munehisa, he later moved to trading the Tokyo stock indices market that was in 18th Century and he made a fortune trading the Tokyo stock indices market using these candles: He is said to have made over 100 consecutive winning trades.
In addition to showing the graphical representations of stock indices trading price traders also use candlestick patterns to gauge and determine the strength of the stock indices trading price movement. Indices traders also study these candlestick patterns so as to learn how to interpret and trade signals from the various candlestick patterns. Indices traders wanting to about the various candlesticks patterns can learn from our indices trading section under the technical analysis topics, the various candlestick patterns used to trade Indices are:
1.Long & short Candles
2.Spinning Tops and Doji Candles
3.Hammer Candle Pattern & Hanging Man Stock Indices Candle Pattern
4.Inverted Hammer Candlestick Pattern & Shooting Star Stock Indices Candle Pattern
5.Piercing Line Indices Candlestick Pattern and Dark Cloud Cover Stock Indices Candle Pattern
6.Morning Star Candles, Evening Star Candles & Engulfing Candlesticks Patterns
Support & Resistance Areas
Some traders also refer to these levels as support & resistance lines. The concepts of support & resistance levels refers to stock indices trading price zones where it is difficult for the stock indices trading price break through & move beyond these levels.
At these levels traders are likely to perceive the stock indices trading price of the indices instrument as being cheap or being expensive.
Support
Support prevents the stock indices trading price of an asset from getting pushed downwards. Support levels are therefore regarded as the floor because these stock indices trading price levels prevent the stock indices trading market from moving indices prices downward past a certain point.
Resistance
Resistance prevents the stock indices trading price of an asset from getting pushed upwards. Resistance levels are therefore regarded as the ceiling because these stock indices trading price levels prevent the stock indices trading market from moving indices prices upward.
Therefore, these levels may be used by trader to determine where to open trades at the points where there is a high risk: reward ratio. For example a trader may open a buy indices trade at a support level and place a stop loss a few pips below that level. The trader buys at this point because they perceive the stock indices trading price to be cheap. A trader may open a sell indices trade at a resistance level and place a stop loss a few pips above the resistance level. The trader sells at this point because they perceive that at that point the stock indices trading price is very expensive and therefore there will be less people willing to buy indices because the stock indices trading price is very expensive and therefore the stock indices trading price is likely to start moving down soon rather than continue to move upwards.
Stock Indices Trendlines
Indices Trend lines are used to determine the general direction of the market.
Sometimes support & resistances are formed diagonally in a similar way like a staircase. This forms a trend, a indices trend is a sustained movement in one direction either upward or downward.
A indices trendline depicts these points of support & resistance for indices trading price.
Indices Trend line is an aspect of technical analysis that uses line studies to try and predict where stock indices trading price will move next.
A indices trend line is a straight diagonal line that connects two or more stock indices trading price points & then extends into the future to act as line of support or resistance.
Indices Trend-lines are based upon the idea that markets move in trends. Indices Trendlines are used to show three things.
- The general direction of the stock indices price trading movement up or down.
- The strength of the current stock indices trading price movement and
- Where future support & resistance of the current stock indices price movement are likely to be located.
If a indices trendline forms in a certain direction then stock indices trading price usually move in that direction for a period of time until a time when the trend line breaks-out.
Upwards indices trend line - If stock indices trading price is moving up then a line is formed that is also moving up. This line is called an upward indices trend line.
Downwards indices trend line - If stock indices trading price is moving down then a line is formed that also moves down. This line is called a downward indices trend line.
Moving Averages Stock Indices Trading Technical Indicator
Moving averages are also used in indices trading to determine the general direction of the market. Moving average is a indices trend following technical indicators that is used to explain the direction of the market.
The most common trading method of determine direction of the trend is by using two moving averages to form the moving average crossover indices system. The moving average crossover stock indices trading system is covered in our indices trading strategies section. The moving average crossover system is made up of two moving averages one with a lower period and the other with a higher period, for example a trader may use the 5 period moving average and the 7 period moving average, when stock indices trading price is moving up the two moving averages will also be moving up and when prices are moving down the two moving averages will also be moving down. Traders can also identify when a indices trend changes its direction because the two moving averages will cross over each other once there is a change in direction of the stock indices trading price movement. This crossover signal is used by stock indices traders to determine when to open a new trade after the crossover signal has been generated and the two moving average start to move in the same direction. This crossover signal is also used to determine when to close a trade and take profit after there is a crossover in opposite direction.
Bollinger Bands Indicator
Bollinger bands is a very popular stock indices indicator, it is also a indices trend following indicator & it is used to show the general indices trend of the stock indices trading market. The Bollinger band is made up of three lines, these are:
·Middle band - this is a moving average of 20 stock indices trading price periods
·Upper Band -shows upper limit of indices trading price
·Lower Band - shows lower limit of indices trading price
Middle band will show the general direction of the market trend whether up or down.
The upper band is where a trader will open a sell indices trade if the stock indices trading market indices trend is down or close their buy indices trade & take profit at this level if the stock indices trading market is trending upwards.
The lower band is where a trader will open a buy indices trade if the stock indices trading market indices trend is up or close their sell indices trade & take profit at this level if the stock indices trading market is trending downwards.
Indices Trading Fib Retracement Levels
Fibonacci retracement levels are popularly used to determine the levels where stock indices trading price retracements are likely to go up to. Indices traders use these retracement levels to determine where to open trades after a indices trading price retracement.
Fibonacci retracement levels are covered in the learn indices trading lessons section of this site under the technical analysis topics. Trader can learn how to use the Fibonacci retracement levels, which levels are oftenly used to open trades & how to draw these retracement levels using Fibonacci retracement indicator.
All these technical analysis techniques are also covered on the indices trading strategies section of this learn indices trading course site & trader can learn more about these concepts & get examples of these concepts are used in trading from this indices trading strategies section that has numerous screenshots illustrations of these technical tools and how they are drawn on indices charts along with explanation of they are used to generate trade signals.
