TIPS: MAXIMIZING PROFITS OF Indices SYSTEMS
Tips for Trade Systems for Beginner Traders - How to Improve Your Trade System When Trading Online
1. Define Simple Stock Indices Rules & Follow the Trend
The simpler the system is the better. If the trading system is too complicated, it'll be very difficult to stick to the rules. Complicated Indices systems are also very confusing. A simple system makes it easy to follow the rules.
2. Eliminate Risk Quickly and Let Profits Run
Minimizing risk is far more important than making money. Our first objective in Stock Indices trading is to make the trade less risky. We do this by entering only high probability trade setups, setting stop losses, cutting losses quick & never average down, and letting the profitable trades run for a while, just long enough but not too long so as increase the profits. Profitable Stock Index trades are only kept open as long as the system shows the market trend is in place, these trades should be closed immediately once your exit signal criteria is generated by the system.
3. Select the Right Stock Index
Once you have your system, you will want to begin testing it on a demo practice trade account. Stock Indices have their own characteristics different from others. A system will give different results for each Indices.
- EUROSTOXX 50 Index
- DAX30 Index
- Dow Jones Industrial Average 30 Index
- FTSE100 Index
- Nikkei225 Index
- S&P ASX200 Index
- FTSEMIB40 Index
- S & P 500 Index
- NASDAQ 100 Index
- CAC40 Index
- SMI20 Index
- AEX25 INDEX
- HangSeng50 Index
- IBEX35 Index
To maximize the profitability of your system find the most active market hours for a chosen Indices & trade during that market session only.
4. Use Stock Index Money Management Rules
Always risk less than 2%per Stock trade. With compounding, you will be surprised to see how quickly your account grows once you begin to trade with a profitable system.
5. Keep a Journal
Keeping a log of all your Stock Indices trades will help you to become a better & better & will help you follow the rules of your system. A journal will also keep track of your profitable Stock Indices trades & losses & you can analyze why a trade setup was profitable & why it was not.
6. Set take Profit Targets
Establish a daily, weekly or monthly profit targets when trading the market. Once you hit this target. This will stop you from over-trading & will also stop you giving back your profits the market. Keep your risk reward ratio high, a 3:1 risk reward ratio is best. This means only opening stock indices trades only when you have the probability of making 3times more than what you are risking.
Example of signals generated by our trading system
Example 1: Buy Signal & Sell Signal Generated By Trading System
Buy signal is generated by the indicator based system, then an exit signal is generated before another reverse sell signal is generated on this trade chart
Example 2: Two buy signals generated by Trading System
Two buy signals are generated during the upward trending market
Example 3: Exit Signal Generated by Trading System
Example of Stock Indices Trade Signals Generated by a Trading System
