🧪 Practice Before You Trade (Risk-Free)
We strongly recommend that all our students start by practicing these strategies in a simulated environment. This allows you to master the trading ticket, understand price fluctuations, and test your strategy without risking a single penny.
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Why we use IG for Index Trading:
Tax-Free Trading: Utilize Spread Betting to keep 100% of your profits (applicable to Ireland and the UK).
Expert Integration: Our strategies are designed to work seamlessly with IG’s charting, liquidity, and execution tools.
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Schedule a 1-on-1 Onboarding Call with Stephen: We can jump on a quick web meeting to walk through the setup together and ensure your account is configured correctly for the US 500 Challenge.
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Video Version
Asset Selection and Pre-Trade Analysis
1. Define Tradable Assets (Liquidity Focus)
Trade: Focus exclusively on highly liquid instruments: FX (Foreign Exchange), specific liquid commodities (like Gold), and Indices (stock market averages).
Avoid: Do not trade individual stocks due to their unique, less predictable liquidity and risk profiles.
2. Check the Economic Calendar
Before the market opens, check the calendar for medium and high-level announcements (e.g., Interest Rate decisions, inflation data).
Be aware of the release times and consider avoiding trade entries in the immediate volatility surrounding these events.
3. Establish the Primary Trend (Daily Chart)
Examine the daily chart to confirm the overall market direction: bull, bear, or sideways.
Rule: Never fight the main trend!
Note: You may trade sideways trends in both directions.
Primary Trend Example ( EUR USD Nov 2025)
Entry Signal & Confirmation
4. Setup the Entry Signal (15-Minute Chart & RSI)
Use the 15-minute chart for trade timing.
Insert the 14-period Relative Strength Index (RSI) indicator.
Set alerts for when the RSI reaches overbought (>70) or oversold (<30) conditions. The alert only serves to signal a potential setup.
5. Wait for Trade Confirmation
Wait for confirmation before placing a trade.
Confirmation: A confirmed entry signal occurs when the short-term uptrend or downtrend is broken on the 15-minute chart.
Place the trade immediately after the trend line break.
Risk Management & Position Sizing
6. Maximum Risk Per Trade (The 2% Rule)
Strict Rule: Never risk more than 2% of your total account value on any single trade. This figure defines your maximum allowable dollar loss.
7. Active Management vs. Hard Stop Losses
The Market Maker Reality: Traditional, static stop losses are visible to market makers who often drive prices to these obvious liquidity pools ("stop hunting") before reversing, unnecessarily cutting you out of a winning trade.
To maximize your win rate, we use a manual, active execution strategy for these short-term day trades:
The Golden Rule: If you have an active, short-term trade open, you must actively watch the screen. Do not walk away from an unhedged position.
Mental Technical Invalidation: Monitor the 15-minute chart closely. You will manually cut the trade if the market violates your invalidation points:
If Short: Be prepared to manually exit if the price breaks and holds above the previous 15-minute high.
If Long: Be prepared to manually exit if the price breaks and holds below the previous 15-minute low.
Emergency Hard Stops: If you absolutely must step away from the screen, or as a catastrophic safety net against sudden market crashes, place a physical emergency stop loss deep outside normal market noise, ensuring it is calculated so your loss never exceeds the 2% maximum risk limit (Rule 6).
Position Sizing Calculation: The size of your position (lots/contracts) must be calculated to ensure that if the price hits your technical SL, your loss does not exceed the 2% maximum risk (Rule 6).
Aggressive Entry: If you "jump the gun" early, set your stop loss very tightly, just below the most recent low or above the most recent high.
8. Position Sizing Refinement
Volatility Adjustment: When calculating position size, consider the asset's current volatility. If an asset is highly volatile, take a smaller position size than the 2% formula might otherwise allow, providing a necessary buffer against market noise.
9. Taking Profit (TP)
Take profit using one of these two criteria:
TP Criteria | Description |
TP Rule 1 (Indicator) | Take profit when the RSI gets back to 50. |
TP Rule 2 (Point Gain) | Take profit when you achieve a 10-point gain. |
What's App Alerts System Explained
Real life Example EUR.USD
10. No holding trades overnight.
If you are using a spread betting account - close trade before 10 pm UK time regardless of whether stop loss or profit taking targets are hit. This is to avoid overnight funding fees.
Trading Psychology & Review
11. Adhere to the Plan (No Revenge Trading)
Discipline: Once a trade plan is established, stick to it rigidly.
Never chase losses or engage in "revenge trading" by over-betting or taking poor setups immediately after a loss.
12. Define and Limit Trading Hours
Limit trading to the market's most liquid times.
Avoid low-volume, choppy midday periods where false signals are more likely.
13. Keep a Trading Journal
Record every trade, including the setup, reason for entry/exit, chart screenshot, final outcome, and your mental state during the trade.
14. Review Weekly
At the end of each trading week, review your journal to calculate your win rate and profitability.
Identify the best-performing setups and the most frequent mistakes to refine your strategy for the next week.
15. Never Over-Leverage
The 2% risk rule must be strictly enforced. Do not use margin calls or risk the entire account balance, as trading capital should be money you can afford to lose.