Learn Trading Strategies

Before coming up with a plan a trader must learn about the various strategies that they can sue to trade indices. Coming up with the right trading strategy can increase your chances of becoming more successful in stock indices trading.

For traders that want to learn about strategies there are 50 indices strategies listed in the strategies section of this strategy. This strategy section also indicates traders how combine these strategies to create a stock system. The trading is a set of rules that will be used by stock traders to generate signals. For example the strategy rules will specify how 2 or more indicators will be used together to generate a buy or a sell signal.

As a trader the trading strategy you select should be applied on your trading once you decide what type of trader you are & what type of method you'll be using to analyze & interpret the indices market moves.

For examples you may decide you want to be a scalper you will use your scalping strategy and only open trades for a couple of a few minutes. If you're a trend trader you'll use your strategy after you've decided the trend of the market. If the trend is upwards you'll use your strategy to open buy indices trades.

If you're a day trade you'll use your strategy to open trades that will only be opened for a couple of a few hours. Your trade positions should all be closed during the day and you'll not hold your trades/transactions overnight. As for the technique which may & might be that of trend following you'll first draw trendlines on the chart to identify the overall trend and after that you will then apply your strategy to execute trades.

In analysis there are various techniques used to trade indices which a trader might use to ascertain which of these techniques of trading they will be using when trading the market. After choose and select in their method traders will then apply their trading strategy to open trades.

Types of Trading Methods

There are 2 general methods of the market, these are:

1.Trend Trading

2.Range Trading

Trend Trading

In this method a indices trader will first determine the overall trend before applying their trading strategy to open trades.

To determine the trend - this can either be an upward trend or a downwards trend.

A trader may use trend lines or MAs to identify the overall market trend. After determining the trend then the trader can use their trading strategy to open trades.

For example a trader may determine that the market trend is upwards by using MAs. The trader may & might then use a stock indicator such as Bollinger bands and open trade transactions once price retraces to the lower Bollinger band because the lower band will act as the support zone of price. Therefore the trading strategy that the trader will be using is the strategy of resistance & support levels and the trader will be using Bollinger Bands to identify these points and open and close-out trade positions based on these points.

Range Trading

Range trading is a method of trading indices that move within a particular band of prices and only oscillates between these 2 points without moving much outside these 2 points.

A trader will then use the trading strategy of support and resistance to identify which levels to open buy or sell trade positions. The trader will draw a support line & a resistance line. The support level will be used to open buy stock trades and the resistance level will be used to open sell trade transactions.

The most popular technique/method between these 2 is the trend method. Investors & Traders should always try to trade with the trend technique as this technique is the most reliable technique in trading indices. Even though sometimes the market will be trending and at other times the market will be moving in a range when the market is consolidating traders should try to trade the markets only when there is a trend. After determining the trend traders then will use their strategy to identify when to open buy or sell stock trade positions that are in direction of the general market trend.

Once you have decided what type of trader you are: scalper, day trader or swing trader you should come up with the following:

1.Method

2.Trading Strategy

After creating this 2 you will then combine these 2 and use these to detect when to buy or close trades.

You can then practice trading on the practice account so as to identify profitability of your trading method & strategy. You'll then use the results to improve the profitability of your method and strategy and once you've gained experience to trade with these 2 you as a trader can then register a trading account and start trading the live market.

Learn More Lessons and Tutorials & Courses:

Trade Stock Indices

Learn Trading Strategies

Types of Trading Methods