TABLE OF CONTENTS S

Trading Indices with FXCM 2

Instructor Spotlight: Walker England 2

Why Trade US30? 4

Which US30 Strategy is Best for You? 4

HFTFalcon US30 5

The Strategy 5

Step 1: Spotting the Trend 5

Step 2: Filtering the Trend 6

Step 3: Focusing on Trade Opportunities 7

Step 4: Execution 8

Execute the Trade and Manage Your Risk 8

LongEagle US30 9

The Strategy 9

Step 1: Spotting the Trend 9

Step 2: Filtering the Trend 9

Step 3: Finding Trade Opportunities 10

Step 4: Execution 11

Execute the Trade and Manage Your Risk 11

What’s Next? 12

Extended Learning 12
TRADING INDICES WITH FXCM

Dear Trader,

I’m Walker England, educator at DailyFX, and I want to teach you how to trade one of the most exciting CFDs (contracts
for difference): 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, efficient trade execution without expensive re-quotes1

Competitive Pricing: Gain exposure to global markets with our low spreads

No Commission: Trade commission free on all FXCM products2

Leverage: Gain access to leverage by trading on margin3

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, I’ve used FXCM’s proprietary Trading Station platform, which you can download for free.

SO, LET’S 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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1 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 difference between the requested rate
and final execution price may be more or less advantageous based on the market activity and available liquidity.

2 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
flow, 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.

3 Leverage: Leverage is a double-edged sword and can dramatically amplify your profits. 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.

3
WHY TRADE US30? DID YOU KNOW?
The US stock market is one of the most heavily traded in the world, and traders everywhere US30 averages 3,500 pips
consistently look for good, cheap ways to trade a basket of US stocks. of monthly movement—use
US30 to trade moves in the
FXCM’s US30 index is the answer. US30 tracks the 30 top-performing companies in the US.
US market.
With FXCM’s low transaction costs, a good trading strategy, and the advantage of leverage
(which can magnify gains as well as losses), you’re 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.

4
HFTFalcon US30 A TREND
The general direction price
Day trading on shorter timeframes can be beneficial, especially to those traders with busy
schedules. The good news is the analysis itself also doesn’t have to be overly complicated. moves over a defined time
The HFTFalcon US30 strategy is designed to get you in on the right side of US30 when it’s period.
overbought or oversold, and then get you out before prices reverse.

THE STRATEGY
There are four steps to finding opportunities in our HFTFalcon US30 strategy.

1. SPOTTING - Use a 30-minute chart to find the direction of the US30 trend

2. FILTERING - Confirm the trend by filtering with a 200-period MVA on a five-minute chart

3. FOCUSING - Once the trend is confirmed, use CCI to find 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 lows—can 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 days—this 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 isn’t a good time to execute
our US30 strategy.

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

Higher High
95.00
93.74

Higher High
90.00
High

Higher Low
85.00
Higher Low

80.00

Low

75.00

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

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STEP 2: Filtering the Trend SIMPLE MOVING
We need to filter the trend further to support our strategy. A great tool to filter the trend is AVERAGE
a Simple Moving Average (MVA) indicator set to 200 periods. The 200-period MVA spots Retail traders and seasoned
directional shifts in the market and can be used to define support and resistance. professionals from banks
and hedge funds use MVAs,
Once the broader trend has been established from Step 1, switch your US30 30-minute
increasing the indicator’s
chart to a five-minute chart (click Chart, Show Data Range, Five Minutes, then 1 Day), then
validity.
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.

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

MVA (US30,Close,200): 11,994

12,039
12,000
200 MVA

OK to Trade

11,500

Do Not Trade

11,000

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

6
Step 3: Focusing on Trade Opportunities COMMODITY
With steps 1 and 2 establishing our trend, we can check the market for opportunities to find
CHANNEL INDEX
and execute a trade. Use the Commodity Channel Index (CCI) oscillator set to 20 periods Gives an easy-to-identify
(right-click on your chart, click Add Indicator, then select CCI). entry point by identifying
overbought/oversold price
Here’s how you use the CCI to find a buy signal. First, watch for the CCI line to move under
levels.
-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.

CCI (US30. Typical, 20): 74.66

Overbought
250.00

100

-100

Oversold
-250.00

7
Step 4: Execution HFTFALCON US30
When confirming signals for buying or selling, watch for all three conditions to occur:
RISK
RECOMMENDATION
SIGNAL TO BUY:
Cap your risk at a maximum
1. US30 trends upward of 1% of your account
2. The current price is above the 200-period MVA balance.
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

If the three conditions within the signal are met, it’s time to execute the trade. If neither set has matching conditions, wait for
better opportunities.

EXECUTE THE TRADE AND MANAGE YOUR RISK

Always have a defined 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 different limit points (where you take your profit).

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 profit.

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.

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

12,050
MVA (US30,Close,200): 12,054

12,000

11,950

Limit
11,900

Entry
11,850

11,800
Stop

11,750

11/10/2011 05:25 07:35 09:45 11:55 14:05 16:30 19:25 21:35 23:45
CCI (US30.Typical, 20): 45.35 250.00
Buy
100

-100

-250.00

8
LongEagle US30
Finding and trading long-term trending movements on US30 can be beneficial to traders who
prefer to monitor positions less intensely. The LongEagle US30 strategy harnesses the Stochastic
Slow Oscillator to find trend pullbacks (changing directions), giving you an advantage in
trading the trend.

THE STRATEGY
There are four steps to finding opportunities in our LongEagle US30 strategy.

1. SPOTTING - Use a daily chart to find the directional movement of the US30 trend

2. FILTERING - Confirm the trend by filtering with a 200-period MVA

3. FINDING - Once the trend is confirmed, use SSD to find overbought/oversold conditions

4. EXECUTING - Look for pullbacks on SSD lines for entry orders

Step 1: Spotting The Trend A TREND

When trading longer-term momentum, trend direction is crucial in determining whether The general direction price
we buy or sell US30. moves over a defined time
period.
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.

Step 2: Filtering the Trend SIMPLE MOVING

The Simple Moving Average (MVA) is an effective trend-filtering tool, used by a variety of
AVERAGE
traders to find the direction of the trend. Use a 200-period MVA (on your chart, click Insert, Retail traders and seasoned
Add Indicator, then select MVA set to 200 periods), and look for a mature trend. professionals from banks
and hedge funds use MVAs,
Consider buying if the current US30 price is above the 200-period MVA. Likewise, sell only
increasing trend validity.
when price is firmly below the indicator line. Below is a scenario where you should only
look to buy US30.
Jun Jul Aug Sep Oct Nov Dec

MVA (US30,Close,200)
16,500
16,384

16,250

16,000

15,750

15,500

15,250

15,000

14,750

14,500

9
Step 3: Finding Trade Opportunities STOCHASTIC SLOW
Technical traders often use oscillating indicators to find pullbacks against the trend, allowing OSCILLATOR
them to buy or sell at a preferred price. Designed to show
momentum resuming in
Use the Stochastic Slow Oscillator (SSD) on a two-hour chart (on your chart, click Insert,
the direction of the trend.
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
20—an 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.

100
STOCHASTIC (US30,15, 5, 5, MVA, MVA) - K: 51.18 D: 33.28

Overbought
80

50.00

20

Oversold
0

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Step 4: Execution LONGEAGLE US30
When confirming signals for buying or selling, watch for all three conditions to occur: RISK
RECOMMENDATION
SIGNAL TO BUY:
Cap your risk at 1% of your
1. US30 trends upward account balance. Set your
2. The current price is above the 200-period MVA limit at 2% profit per trade.
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

If the three conditions within the signal are met, it’s 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.

EXECUTE THE TRADE AND MANAGE YOUR RISK

Always have a defined 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 profit 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 profit target. Set your limit price 100 pips above
your entry price.

10/19 10/21 10/23 10/25 10/27 10/29 Nov

MVA (US30, Close 200): 11,962

12,060
Limit 12,000

Entry
0.00

Stop
11,500

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
100
STOCHASTIC (US30,15, 5, 5, MVA, MVA) - K: 25.45 D: 21.98
80

Buy
20
0

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WHAT’S NEXT?
You’ve learned two trend-based strategies for US30. You can start risk free: Sign up for an FXCM demo account. The FXCM demo
account offers a free simulation of a real trading account and all the functions of a real trading account—streaming
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 offers 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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