As traders, all we really need to know is when a market is going to stop moving in one direction then turn around and head in the other.
The rest is noise.
I try to concentrate most of my energy on identifying these times.
The day trading information presented here is applicable to longer term position trading.
Read on to learn what a market requires to make a turn.
More Market Observations Taken From Trading Notes: "There is usually big futures contracts buying at similar levels before a big rally.
" Keep an eye on the e-mini futures volume coming in at these big double or triple pivot points.
The pros out there who are buying and selling 500-1500 futures contracts at a clip didn't get to those numbers by being sloppy.
They have the patience to let the mud ducks buy and sell in the comfortable inner band areas.
The old men come down from the hills to buy only when something big gets broken and the volume soars.
Try to think like them.
Pretend you have 10,000 futures contracts to move.
(I believe the limit is something like 100,000 e-minis these days or maybe more) There's no way to move big numbers when the e-mini market is in a lazy chop.
You need panicking action.
Sometimes the e-mini market will keep on going in one direction, but it's rare.
You need to join into these frays on the opposite side when the mud ducks are spitting out their 1's and 2's.
You have a better chance of coming out on top if you can pull it off.
It's not easy.
(By the way, I sometimes join the mud ducks more often than I like, but I'm working on it...
grin.
) Observation: "The five minute momentum on the last bottoming day gets in sync and the e-mini futures price starts creeping up and later rallies big.
" Use whatever you want - momentum, stochastics or just price, to sense the rhythm of the e-mini futures market.
During a chop, the market is haywire.
Not much rhythm within the indicators, just noise.
Keep an eye on the indicators and watch when they start to get back in sync with price.
When the e-mini market is trending, indicators are in sync with price.
That's your reference.
You usually have at least 30 minutes of warning before the real move takes off.
The indicators will get smooth and bullish looking while the price acts bullish within its chop.
This is a subtle event to witness and takes long practice to see in real time.
In hindsight it's easier, of course.
That's why you want to look over the beginnings of big e-mini futures moves from the past, as they chop in preparation for the move.
Once you identify these subtle signals, the market will prove why it screamed at you to buy.
Once the big boys are aware of this subtle change, they will usually slam the market to a new low to shake out the contracts they need.
Then out of nowhere, the volume comes in and the market takes off upwards like a rocket.
The signs were there if you know what to look for.
Not always, but enough to give you that little edge and more critical information needed to take on the risk for the moment.
Part Two of Five Parts - Next! There is substantial risk of loss trading futures and options and may not be suitable for all types of investors.
Only risk capital should be used.
The rest is noise.
I try to concentrate most of my energy on identifying these times.
The day trading information presented here is applicable to longer term position trading.
Read on to learn what a market requires to make a turn.
More Market Observations Taken From Trading Notes: "There is usually big futures contracts buying at similar levels before a big rally.
" Keep an eye on the e-mini futures volume coming in at these big double or triple pivot points.
The pros out there who are buying and selling 500-1500 futures contracts at a clip didn't get to those numbers by being sloppy.
They have the patience to let the mud ducks buy and sell in the comfortable inner band areas.
The old men come down from the hills to buy only when something big gets broken and the volume soars.
Try to think like them.
Pretend you have 10,000 futures contracts to move.
(I believe the limit is something like 100,000 e-minis these days or maybe more) There's no way to move big numbers when the e-mini market is in a lazy chop.
You need panicking action.
Sometimes the e-mini market will keep on going in one direction, but it's rare.
You need to join into these frays on the opposite side when the mud ducks are spitting out their 1's and 2's.
You have a better chance of coming out on top if you can pull it off.
It's not easy.
(By the way, I sometimes join the mud ducks more often than I like, but I'm working on it...
grin.
) Observation: "The five minute momentum on the last bottoming day gets in sync and the e-mini futures price starts creeping up and later rallies big.
" Use whatever you want - momentum, stochastics or just price, to sense the rhythm of the e-mini futures market.
During a chop, the market is haywire.
Not much rhythm within the indicators, just noise.
Keep an eye on the indicators and watch when they start to get back in sync with price.
When the e-mini market is trending, indicators are in sync with price.
That's your reference.
You usually have at least 30 minutes of warning before the real move takes off.
The indicators will get smooth and bullish looking while the price acts bullish within its chop.
This is a subtle event to witness and takes long practice to see in real time.
In hindsight it's easier, of course.
That's why you want to look over the beginnings of big e-mini futures moves from the past, as they chop in preparation for the move.
Once you identify these subtle signals, the market will prove why it screamed at you to buy.
Once the big boys are aware of this subtle change, they will usually slam the market to a new low to shake out the contracts they need.
Then out of nowhere, the volume comes in and the market takes off upwards like a rocket.
The signs were there if you know what to look for.
Not always, but enough to give you that little edge and more critical information needed to take on the risk for the moment.
Part Two of Five Parts - Next! There is substantial risk of loss trading futures and options and may not be suitable for all types of investors.
Only risk capital should be used.
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