TABLE OF CONTENTS

Trading Indices with FXCM

Instructor Spotlight: Walker England
Why Trade US30?
Which US30 Strategy is Best for You?
HFTFalcon US30
The Strategy
Step 1: Spotting the Trend
Step 2: Filtering the Trend
Step 3: Focusing on Trade Opportunities
Step 4: Execution
Execute the Trade and Manage Your Risk
LongEagle US30
The Strategy
Step 1: Spotting the Trend
Step 2: Filtering the Trend
Step 3: Finding Trade Opportunities
Step 4: Execution
Execute the Trade and Manage Your Risk
Whats Next?
Extended Learning
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TRADING INDICES WITH FXCM
Dear Trader,
Im Walker England, educator at DailyFX, and I want to teach you how to trade one of the most exciting CFDs (contracts
for dierence): stock indices.
When you trade CFDs with FXCM, you can easily take broad market positions on a variety of stock indices from around
the world. Plus, our single sign-on access lets you trade stocks, forex and other CFDs all on the same platform.
WHY TRADE INDICES THROUGH FXCM?
No Re-Quotes: Enjoy fast, ecient trade execution without expensive re-quotes
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Competitive Pricing: Gain exposure to global markets with our low spreads
No Commission: Trade commission free on all FXCM products
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Leverage: Gain access to leverage by trading on margin
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Hedging Capability: Go long or short in a single index trade
Micro CFDs: Trade the global market on any budget
The strategies in this guide are designed by me and my team at DailyFX to get you comfortable trading the index market.
ONE NOTE: For the strategies, Ive used FXCMs proprietary Trading Station platform, which you can download for free.
SO, LETS GET STARTED.
Happy Trading,
Forex Trading Instructor
Twitter: @wenglandfx
INSTRUCTOR SPOTLIGHT: WALKER ENGLAND
Expertise: Short-Term Strategies, Scalping, Price Action Analysis, Risk Management
Walker is an education instructor for DailyFX, specializing in short-term trading strategies for forex and
CFD products.
He holds degrees in Economics and Finance from Texas State University. His primary focus is trading,
with more than 12 years of experience across international markets. Walker actively publishes market
articles and produces educational webinars for DailyFX.
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No Re-Quote Policy: FXCM maintains a no re-quote policy. Circumstances exist based on order size, trading pattern, and
market conditions where individuals may not receive execution at the requested rate. Orders are executed at the next
available rate within the trader's parameters, subject to market conditions. The dierence between the requested rate
and nal execution price may be more or less advantageous based on the market activity and available liquidity.
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Compensation: When executing customers trades, FXCM can be compensated in several ways, which include, but are
not limited to: adding a mark-up to the spreads it receives from its liquidity providers, receiving compensation for order
ow, and charging commission to accounts that trade with FXCM's lowest spreads which are available to qualifying
accounts. Under the Dealing Desk execution model, FXCM may act as a dealer and may receive additional compensation
from trading.
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Leverage: Leverage is a double-edged sword and can dramatically amplify your prots. It can also just as dramatically
amplify your losses. Trading foreign exchange with any level of leverage may not be suitable for all investors.
Risk Warning: Our service includes products that are traded on margin and carry a risk of loss to all of your deposited
funds and may not be suitable for all investors. Please ensure that you fully understand the risks involved.
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WHY TRADE US30?
The US stock market is one of the most heavily traded in the world, and traders everywhere
consistently look for good, cheap ways to trade a basket of US stocks.
FXCMs US30 index is the answer. US30 tracks the 30 top-performing companies in the US.
With FXCMs low transaction costs, a good trading strategy, and the advantage of leverage
(which can magnify gains as well as losses), youre ready for any market condition.
This US30 Trading Guide gives you the ins and outs of two unique trading strategies and
the technical indicators that help determine buy and sell signals.
Feel free to test these strategies on a free FXCM demo account, which has live US30 prices,
on our proprietary Trading Station platform.
WHICH US30 STRATEGY IS BEST FOR YOU?
Like the speed and excitement of day trading? Then the HFTFalcon US30 strategy may be
for you. Or are you more of a long-term trader? Then LongEagle US30 is your best bet.
DID YOU KNOW?
US30 averages 3,500 pips
of monthly movementuse
US30 to trade moves in the
US market.
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HFTFalcon US30
Day trading on shorter timeframes can be benecial, especially to those traders with busy
schedules. The good news is the analysis itself also doesnt have to be overly complicated.
The HFTFalcon US30 strategy is designed to get you in on the right side of US30 when its
overbought or oversold, and then get you out before prices reverse.
THE STRATEGY
There are four steps to nding opportunities in our HFTFalcon US30 strategy.
1. SPOTTING - Use a 30-minute chart to nd the direction of the US30 trend
2. FILTERING - Conrm the trend by ltering with a 200-period MVA on a ve-minute chart
3. FOCUSING - Once the trend is conrmed, use CCI to nd overbought/oversold conditions
4. EXECUTING - Buy or sell using two orders for multiple exits
STEP 1: Spotting The Trend
Looking for the trend is as straightforward as checking your graph for higher highs or lower lowscan you see an uptrend or
downtrend from across the room? Use a 30-minute chart to see if US30 is on a tradable trend (expand your chart out to a
week or two).
Below is an example of an uptrend, where price moves consistently to higher highs. Watch for the trend to last more than
six trading daysthis adds validity to your market bias (bullish or bearish). Once a trend is established, buying and selling
decisions are easier:
Buy in an uptrend and sell in a downtrend. If no upward or downward trend is found, now isnt a good time to execute
our US30 strategy.
A TREND
The general direction price
moves over a dened time
period.
5
95.00
90.00
85.00
80.00
75.00
93.74
10/04 10/05 10/06 10/07 10/11 10/12 10/13 10/14 10/18 10/19 10/20 10/21 10/25
10/03/2011 03:00 10/07 12:30 10/12 02:30 10/14 14:30 10/19 04:30 10/23 18:30 10/26 06:00 10/28 17:00
Higher High
Higher High
High
Low
Higher Low
Higher Low
SIMPLE MOVING
AVERAGE
Retail traders and seasoned
professionals from banks
and hedge funds use MVAs,
increasing the indicators
validity.
STEP 2: Filtering the Trend
We need to lter the trend further to support our strategy. A great tool to lter the trend is
a Simple Moving Average (MVA) indicator set to 200 periods. The 200-period MVA spots
directional shifts in the market and can be used to dene support and resistance.
Once the broader trend has been established from Step 1, switch your US30 30-minute
chart to a ve-minute chart (click Chart, Show Data Range, Five Minutes, then 1 Day), then
add a Simple Moving Average (right-click on your chart, click Add Indicator, then select MVA
and enter 200 in Periods).
In an uptrend, only look to buy US30 if the current price is above the MVA line; in a
downtrend, only look to sell if price is below the MVA line. If the price is exactly on the
MVA line, then wait for better US30 trading opportunities that meet these parameters.
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12,000
11,500
11,000
12,039

10/13 10/14 10/17 10/18 10/19 10/20 10/21 10/24 10/25 10/26 10/27 10/28 10/31
10/12/2011 08:30 10/17 17:00 10/19 14:00 10/21 11:00 10/25 10:00 10/27 07:00
200 MVA
OK to Trade
Do Not Trade
MVA (US30,Close,200): 11,994
COMMODITY
CHANNEL INDEX
Gives an easy-to-identify
entry point by identifying
overbought/oversold price
levels.
Step 3: Focusing on Trade Opportunities
With steps 1 and 2 establishing our trend, we can check the market for opportunities to nd
and execute a trade. Use the Commodity Channel Index (CCI) oscillator set to 20 periods
(right-click on your chart, click Add Indicator, then select CCI).
Heres how you use the CCI to nd a buy signal. First, watch for the CCI line to move under
-100, indicating that US30 may be oversold. Then, when the US30 price moves back above
-100, as momentum moves upward, execute your buy trade. Conversely, in US30
downtrends, only sell as prices move back below the 100 overbought line.
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CCI (US30. Typical, 20): 74.66
250.00
100
0
-100
-250.00
Overbought
Oversold
EXECUTE THE TRADE AND MANAGE YOUR RISK
Always have a dened risk tolerance when entering into a trade.
The HFTFalcon US30 stop price is based on the current 200-period MVA price line. Use a little wiggle room and place
stops below the MVA line when buying or above when selling.
HFTFalcon US30 utilizes a two-part trade system with dierent limit points (where you take your prot).
TRADE ONE: Use a 1:1 risk-reward ratio. Set the stop price and limit price an equal number of pips from the entry price.
If the stop is 50 pips from entry (based on the MVA price), the limit is set at 50 pips of prot.
TRADE TWO: Set your stop at the same price as Trade One, but use a trailing stop (click Stop, click Trailing Stop, click Dynamic).
The Trailing Stop automatically moves your stop price forward as the trade goes in your favor. Leave Trade Two open as the
position continues to trend. The position closes when the market price reaches the current trailing stop point.
HFTFALCON US30
RISK
RECOMMENDATION
Cap your risk at a maximum
of 1% of your account
balance.
Step 4: Execution
When conrming signals for buying or selling, watch for all three conditions to occur:
SIGNAL TO BUY:
1. US30 trends upward
2. The current price is above the 200-period MVA
3. The CCI is below -100 and moves upward
SIGNAL TO SELL:
1. US30 trends downward
2. The current price is below the 200-period MVA
3. The CCI is above 100 and moves downward
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If the three conditions within the signal are met, its time to execute the trade. If neither set has matching conditions, wait for
better opportunities.
12,050
12,000
11,950
11,900
11,850
11,800
11,750
250.00
100
0
-100
-250.00
MVA (US30,Close,200): 12,054
03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 18:00 19:00 20:00 21:00 22:00 23:00 11/11
11/10/2011 05:25 07:35 09:45 11:55 14:05 16:30 19:25 21:35 23:45
Limit
Entry
Stop
CCI (US30.Typical, 20): 45.35
Buy
A TREND
The general direction price
moves over a dened time
period.
LongEagle US30
Finding and trading long-term trending movements on US30 can be benecial to traders who
prefer to monitor positions less intensely. The LongEagle US30 strategy harnesses the Stochastic
Slow Oscillator to nd trend pullbacks (changing directions), giving you an advantage in
trading the trend.
THE STRATEGY
There are four steps to nding opportunities in our LongEagle US30 strategy.
1. SPOTTING - Use a daily chart to nd the directional movement of the US30 trend
2. FILTERING - Conrm the trend by ltering with a 200-period MVA
3. FINDING - Once the trend is conrmed, use SSD to nd overbought/oversold conditions
4. EXECUTING - Look for pullbacks on SSD lines for entry orders
Step 1: Spotting The Trend
When trading longer-term momentum, trend direction is crucial in determining whether
we buy or sell US30.
Looking for the trend is as straightforward as checking your graph for higher highs or lower
lows. Use a daily chart to see if US30 is on a tradable trend.
SIMPLE MOVING
AVERAGE
Retail traders and seasoned
professionals from banks
and hedge funds use MVAs,
increasing trend validity.
Step 2: Filtering the Trend
The Simple Moving Average (MVA) is an eective trend-ltering tool, used by a variety of
traders to nd the direction of the trend. Use a 200-period MVA (on your chart, click Insert,
Add Indicator, then select MVA set to 200 periods), and look for a mature trend.
Consider buying if the current US30 price is above the 200-period MVA. Likewise, sell only
when price is rmly below the indicator line. Below is a scenario where you should only
look to buy US30.
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MVA (US30,Close,200)
16,500
16,250
16,000
15,750
15,500
15,250
15,000
14,750
14,500
Jun Jul Aug Sep Oct Nov Dec
16,384
Step 3: Finding Trade Opportunities
Technical traders often use oscillating indicators to nd pullbacks against the trend, allowing
them to buy or sell at a preferred price.
Use the Stochastic Slow Oscillator (SSD) on a two-hour chart (on your chart, click Insert,
Add Indicator, then select SSD). Your SSD should have Parameter Calculations of 15, 5
and 5.
When buying in an uptrend, look for pullbacks on the stochastic line (blue line) underneath
20an oversold condition. This signals a dip in price; you want to buy when momentum
shifts back above the oversold line. Conversely, in a downtrend, look to sell when the
stochastic line moves to overbought levels (80 or higher) and re-crosses the line heading
lower.
STOCHASTIC SLOW
OSCILLATOR
Designed to show
momentum resuming in
the direction of the trend.
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STOCHASTIC (US30,15, 5, 5, MVA, MVA) - K: 51.18 D: 33.28
100
80
50.00
20
0
Oversold
Overbought
EXECUTE THE TRADE AND MANAGE YOUR RISK
Always have a dened risk tolerance when entering into a trade.
For our LongEagle US30 strategy, if there is an uptrend and you are buying, then place your stop just below the low of the
past 15 candles. If the market is in a downtrend and you are selling, then place your stop over the highest price of the last
15 candles.
Set your limit to take prot if US30 moves in your favor. Use a 1:2 risk-reward ratio (twice the distance of your stop entry).
For example, if risking 50 pips with a stop, at minimum, look for a 100-point prot target. Set your limit price 100 pips above
your entry price.
If the three conditions within the signal are met, its time to execute the trade. If neither set has matching conditions, wait for
better opportunities. This strategy only requires a single trade ticket for each buy or sell signal.
LONGEAGLE US30
RISK
RECOMMENDATION
Cap your risk at 1% of your
account balance. Set your
limit at 2% prot per trade.
Step 4: Execution
When conrming signals for buying or selling, watch for all three conditions to occur:
SIGNAL TO BUY:
1. US30 trends upward
2. The current price is above the 200-period MVA
3. The SSD line (blue) has crossed below 20 and re-crossed back above 20
SIGNAL TO SELL:
1. US30 trends downward
2. The current price is below the 200-period MVA
3. The SSD line (blue) has crossed above 80 and re-crossed back below 80
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MVA (US30, Close 200): 11,962
10/17/2011 09:00 10/19 21:00 10/21 13:00 10/25 05:00 10/26 21:00 10/25 13:00 11/01 05:00
10/19 10/21 10/23 10/25 10/27 10/29 Nov
12,060
12,000
0.00
11,500
Limit
Stop
Entry
100
80
20
0
Buy
STOCHASTIC (US30,15, 5, 5, MVA, MVA) - K: 25.45 D: 21.98
WHATS NEXT?
Youve learned two trend-based strategies for US30. You can start risk free: Sign up for an FXCM demo account. The FXCM demo
account oers a free simulation of a real trading account and all the functions of a real trading accountstreaming
prices, charts and others.
With the demo, you get the feel for how these strategies work. You can practice trading your opinion of US30, buying and
selling directly on the FXCM Trading Station platform.
Ready to try it live? Open an FXCM account today and put your strategies into action.
EXTENDED LEARNING
FXCM oers a variety of resources to traders. Additional strategies to trade the market are available after opening a real
trading account. You gain access to DailyFX Plus and more than 25 live trading webinars each week.
Some good resources for extended learning:
TRADING WITH MOVING AVERAGES
TRADING WITH STOCHASTICS
TREND TRADING
If you have any questions on trend trading, opening demo or real accounts, or you need more information, contact us for
a one-on-one strategy discussion:
Australia: 1800 109 751
UK: 0808.234.8789
World: +1.212.897.7660
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