20 Pips Price Range MA Moving Average System
The 20 pips price range moving average strategy is used with the 1 Hour Index trade chart & 15 minute Indices trade chart. On this trade chart time frames we use the 100 and 200 simple MA technical indicator.
Both the 1 Hour and 15 minute Index trade chart time-frames will use the 100 & 200 SMA (SMA Indicator) to figure out the direction of the price trend.
The 1 Hour Stock Index trade chart time-frame checks the long term direction of the price trend, upward or downwards trend, depending on the direction of MAs. All trade positions taken should be in this trend direction.
We then use the 15 minute Index trade chart to find the optimal point to enter Index trades. Trades are opened only when the price is within 20 pips range of the 200 simple Moving Average, if price isn't within this pip range Indices trade positions are not opened.
Buy Trading Signal - Uptrend/Bullish Market
To generate buy (bullish Stock signals) using 20 pips MA strategy, we shall use the 1hour and 15 minute Indices trade chart timeframe.
On the 1 hour Stock Index trade chart time-frame the price of the trade chart should be above both the 100 and 200 simple moving average. We then move to a lower Index trade chart timeframe, the 15 minute chart time frame to generate a signal.
On 15 minute Indices trade chart timeframe, when the price gets to 20 pips range above the 200 SMA, we open a buy Indices trade & place a stop loss 30 pips below the 200 SMA. Stop loss can be adjusted to the amount of Pips that are suitable for your risk but to avoid being stopped out by normal Indices volatility its best to use 30 pips stop loss.
A buy Indices trade can also be opened when the price tests/touches the 100 Simple moving average, provided it’s not very far from the 200 SMA. Normally the 100 SMA will be within the 20 pips range of the 200 SMA.
100 and 200 Simple MA Moving Average Buy Signal - Moving Average Index Trading Strategy
Sell Signal - Downtrend/Bearish Market
To generate sell (short Stock signals) using 20 pips MA strategy, we shall also use the 1 hour Index trade chart time-frame & 15 minute Index trade chart timeframe.
On the 1 hour Stock Indices trade chart timeframe, the price should be below both the 100 & 200 SMA. We then move to the 15 minute Index trade chart time frame to generate a Signal.
On 15 minute Indices trade chart, when the price gets to 20 pips range below the 200 SMA, we open a sell trade & place a stop loss 30 pips above the 200 simple moving average.
100 and 200 Simple MA Moving Average Indices Sell Signal - Moving Average Index Trading Strategy
With this strategy method price will generally bounce of these support and resistance levels because many traders watch these zones, and open similar Index trade positions at around the same point.
These support & resistance levels act as short term resistance/support levels within the price charts.
Profit Taking level For This Trading System
With this strategy the price will bounce & head in the direction of the initial trend. This move will range and vary from 60 - 70 pips.
Best profit booking level would therefore be considered to be 60 - 70 pips from the 200 SMA.
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