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

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

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

The key-word is SET OF Indices RULES which you as a Stock Index trader must follow. If you do not follow the trading rules then you don't have a system. Stock Indices systems must have rules which are written down within your plan.

Example illustration of Trade System below:

Stock Indices Trading Strategy Tutorial Guide - Index Indicator Strategy Example

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

You can develop the above system using the steps below:

Step 1:

Select and Choose your Chart Time-frame - 1 hour trade chart

Step 2:

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

Step 3:

Select Indicators that confirm the market trend - RSI, Stochastic

Step 4:

Finding entry & exit points

Long Entry

Both Moving Average MA pointing up
RSI above 50
Stochastic oscillator going up

Short Entry

Both MA Moving Average pointing down
RSI below 50
Stochastic oscillator going down

Exit

Moving Average generates in the opposite trend signal
RSI generates in the opposite trend signal

Step 5:

Calculating risks in every trade transaction - 20 pips

Step 6:

Write down the system Indices rules

Step 7:

Test the trading system on a practice account

After using these guidelines we develop a written system rules below.

Writing System Rules

Example of How Do You Write the Best System Rules

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

Indices Strategy Tutorial Guide - Index Indicator Strategy Example

Generate Buy & Sell Signals using Written Stock Index Trading System Rules

We have finished writing the trading rules, if you're researching on how to develop the best system, this learn trading tutorial is a good begin place to guide you on how to do and carry out just that. This is one part of the plan. Now how do you as a trader develop a complete Index plan? To read and study about Forex plan tutorial navigate to right navigation menu of this web site under key concepts where you as a stock indices trader can find a link for this trade plan lesson.

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