Indices Trade System Rules: Write Down The Rules & Follow Them

We shall use the 1 hour trade chart to write the rules of this strategy - Indices system.

A Indices system refers to a set of written rules that you follow to manage your trades. These rules must be written down so that as to guide you. The following learn trading tutorial will show you how to write the rules of your system.

The keyword is a SET OF Indices RULES which you must follow. If you don't follow the rules then you don't have a system. Indices systems must have rules which are written down within your plan.

Example of Trade System below:

Writing Rules of a Trade System - 1 hour Trade Chart Time frame Trading

You can come up with the above system using the steps below:

Step 1:

Choose your Chart Time Frame - 1 hour trade chart

Step 2:

Choose Indicators that identify a new trend - Moving Average Crossover System.

Step 3:

Choose Indicators that confirm the trend - RSI, Stochastic

Step 4:

Finding entry and exit points

Long Entry

1. Both MA pointing up
2. RSI above 50
3. Stochastic oscillator going up

Short Entry

1. Both MA pointing down
2. RSI below 50
3. Stochastic oscillator going down

Exit

1. MA gives opposite signal
2. RSI gives opposite signal

Step 5:

Calculating risks in each trade - 20 pips

Step 6:

Write down the trade system Stock Indices rules

Step 7:

Test the system on a practice account

After using these steps we come up with the written system rules below.

Writing Trade System Rules

Example of How Do You Write the Best Trade System Rules

This system produces the signals as is shown below. Using these rules traders can determine when to enter & exit trades.

Generate Buy and Sell Signals using Written Stock Indices Trade System Rules

We have completed writing the rules, if you are researching on how to create the best system, this learn trading tutorial is a good begin to guide you on how to do just that. This is one part of a the plan. Now how do you create a complete Indices plan? To read about Forex plan tutorial go to the right navigation menu of this website under key concepts where you can find a link for this trade plan topic.