INDICES TRADING PLAN - EXAMPLE OF STOCK INDICES TRADING PLAN

Illustrated Below is example illustration of a indices plan that a trader can use as a template to come up with one of their own.

JUSTIFICATION FOR A TRADING PLAN

1. Trade IS A BUSINESS, BUSINESSES THAT ARE SUCCESSFUL ALWAYS HAVE A PLAN

Businesses that are successful always begin with a plan.
Successful biz plan will guide you to success, think of your plan as a map - it's a constant reminder of how you'll consistently pull profits from the trading stock indices market .
Difference between a successful Indices trader and a losing trader is the plan.

2. TO KEEP ME IN THE RIGHT DIRECTION

Consistency is important in your trading routine to measure how successful you are as a trader.

Keep you on target, read and study it every day & stick to it.

IF YOU HAVE A GOOD TRADING PLAN AND YOU ARE DISCPLINED ENOUGH TO STICK TO IT YOU WILL BE SUCCESSFUL.

INDICES TRADING STRATEGY

Our Stock Index strategy will only open bullish trades, this is because indices moves are based on the principle that stock prices always move up over time, henceforth the indices that track these stock prices movement will over time move in a general upward direction. To open a buy trade we shall wait for a price pull back and buy these dips.

TREND DIRECTION

· BULLISH BUY TRADES ONLY

· WAIT FOR PULLBACKS - BUY THE DIPS

TRADING SYSTEM

GOALS OF THE SYSTEM

Ability to IDENTIFY TREND AS EARLIEST AS POSSIBLE .
Ability to AVOID WHIPSAWS .

A Trade System should find a compromise between the two Goals,

Get a way to identify a price trend as early as possible but also find methods to help you distinguish the whipsaw signals from real signals.

FUNCTIONS OF EACH OOF--THEE INDICATOR

MA - Spot a new market trend as early as possible.

RSI - Confirm the start of a new trend.

TIMEFRAMES

Main timeframe is the 1H.
Signals are derived/generated on the 1H time frame.

5 & 7 L MA
RSI (14)

RULES

LONG ENTRY

1H Chart

Both MAs are moving UP
RSI greater and higher than 50

LONG EXIT

MA generates in the opposite trend signal

TRADE ROUTINE

Signals are generated using 1H time frame.
Signals to be executed immediately the trading rules are met and matched ( Not Before ) .
Entry signals should be executed during the day-time.
Close all trade transactions at the end of the day.

TIME OF THE DAY TO TRADE MARKET

Watch market during the day-time

Stock Index Trading Plan - Explanation of Trading Plan - How to write a Index Trading Plan

MONEY MANAGEMENT

· Day trading - Low risk High return method

· Trade when I have a high risk reward ratio 3:1 or more

· Never trade more than 10 % of account total account balance

· Never risk more than 2 % on one trade position.

MINDSET & PSYCHOLOGY

Trade without Emotions (greed, fear, anticipation, impulse, bias, over-excitement)
I trade what my eyes see & not what I feel.
I'll be patient.

My job description isn't to be the system!

It's not to decide which trades looks promising and which does not.

That's the job of my system. My system has a set of rules which tell me this is what I follow. Do not get caught-up in the price action & make your own rules as you go along.

MY JOB IS

To sit patiently and wait for my system to show that it is time to enter or it's time to exit. And then with great focus I execute trade as planned.

Taking trades not given by the trade system, second guessing system & not taking trades given, hesitating & getting in late, anticipating and getting in early are all common-place and boil down to lack of faith in system & not having a burning desire on accurate execution.

GOAL: To have 100% undivided resolve on mastering the ability to execute my Indices system accurately.

The more you develop your ability to step back from market movements and watch the market dispassionately, waiting for a signal to trade, the easier it will be to witness the fluctuations of your trading emotions without getting sucked into them and allowing them to throw you off your game.

WEAKNESS

I am greedy.
I over-trade
Make a list of all your weaknesses which are interfering with your trading. This is the first step to help you to over-come the these weak-nesses. Use psychology to help you overcome them.

Note: by noting down your weaknesses you will start recognizing them as you trade, once you do this you'll start to avoid this mistakes and your trading will improve.

GOALS

To focus on the exit signal just as much as I do on the entry.
Always protect my account using stoploss order, money management strategies, trading with the trend and always following the trading rules of my system & plan.
Never second guess or go against my system. To always keep up my discipline.
Follow all the rules of my system and never break them.
Trade fewer times and execute all my trade transactions correctly. Trade what I see, what the trading system + charts are telling me.
Sit patiently and wait out for signals from my system.
Achieve consistent profitable results.

Write down goals and focus on achieving these goals and objectives on your trading

FOLLOW THIS SYSTEM

This is the most important part of making the system.

Always follow the rules

Stick with the trading rules

Be disciplined and patient enough

JOURNAL

Log all my trade positions in a journal so as to track my progress.

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