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In This Issue
Special Feature: Using Tick Charts and Oscillators for Day-Trading
Currency Futures Report: Record Volume
Economic Reports and Expiration Notices
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Newsletter Archives
November 12, 2008
by Ilan Levy-Mayer, Vice President of Cannon Trading and CTA at Levex.net
There is no perfect way to day-trade, but there are different techniques that can work well in different market environments. In this week's short educational feature, I will touch upon one method you may want to add to your trading arsenal: using tick charts and oscillators.
Please note: using tick charts and oscillators works better on choppy, two sided ways, but it is not recommended when the market has a strong trend.
Basic Principles of Using Tick Charts and Oscillators
Using a tick chart rather than a time chart.
I prefer tick charts when day-trading shorter time frames because tick charts include market volume. If you are using a 5 minute chart, for example, you may get signals simply because time has passed and certain indicators you are using adopt certain values. But at times where there is a lot of movement in the market, you won't have to wait until your time frame bar closes to get your signal, and volume becomes a bigger and more important part of your trading decision.
About Tick Charts
Tick bars are built based on volume, either tick or actual volume when available, and time is not a factor. Each bar in a Constant Volume Bar chart contains a specified volume level that is reached by accumulating the volume of each of the underlying bars. When that volume level is reached, the next Constant Volume Bar begins to accumulate volume from the underlying bars. For intraday charts, tick volume is used to determine the Constant Volume Bars.
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Disclaimer: There is a risk of financial loss in futures and options trading. Futures trading is neither easy nor an easy way to make money. It takes hard work to have success. Please use sound money management when trading futures. Past performance is not necessarily indicative of future results. Nothing in this newsletter is intended to be a trading recommendation for you to buy or sell futures or options. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed. Readers are solely responsible for how they use the information in this newsletter.
CME Group FX products set monthly and quarterly records as June ended, with a new daily record in notional value of $168.4 billion established on June 10, 2008, and average daily notional value for the month of $107 billion. Quarterly average daily notional value was $93.8 billion.
Click the image to enlarge.
June 10 also marked the second-highest volume day ever for CME Group FX, with 1,264,086 futures and options contracts traded. That volume number was surpassed only on December 8, 2006, when 1,268,883 contracts were traded.
June 2008 volume of 763,700 contracts per day surpassed June 2007 by 14 percent. Volume for the second quarter of 2008 was a record 665,143 contracts, which exceeded last year's Q2 volume by 26 percent, and first quarter 2008 by 4 percent.
Trading FX options on CME Globex offers the flexibility, speed, access, liquidity and security needed to get the highest possible return from your trading. Month after month, this electronic platform and liquidity continue to grow. In June 2008 our total average daily notional value for FX options was $3.6 billion with 22,465 contracts traded, compared to $2.0 billion June 2007, when 15,168 contracts traded. Additionally, this past March marked a record month of over $4.8 billion in daily FX options liquidity.
Click the image to enlarge.
*** Source: CME Group
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 08/14 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Core CPI & CPI(Jul) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply NOPA Crush |
LT: Aug Lean Hogs(CME)
Aug Soybeans(CBT) Aug Soybean Meal(CBT) Aug Soybean Oil(CBT) Aug Lean Hogs Options(CME) |
| 08/15 Fri |
7:30 AM CDT - Dairy Products Prices
7:30 AM CDT - NY Empire State Index(Aug) 8:00 AM CDT - Net Foreign Purchases(Jun) 8:15 AM CDT - Capacity Util & Industrial Prod(Jul) 9:00 AM CDT - Mich Sentiment-Prel(Aug) |
LT: Aug GSCI(CBT)
Aug Valueline Options(KCBT) Aug DJIA Options(CBT) Aug E-Mini S&P 500 Options(CME) Aug NASDAQ 100 Options(CME) Aug S&P Options(CME) Aug Nikkei 225 Options(CME) Aug Eurodollar Options(CME) Sep Orange Juice Options(ICE) Sep Cotton Options(ICE) Sep Crude Oil Options(NYM) |
| 08/18 Mon |
|
FN: Sep Cocoa(ICE)
LT: Aug LIBOR(CME) Aug US T-Bill(CBT) Aug Eurodollar(CME) Aug LIBOR Options(CME) |
| 08/19 Tue |
7:30 AM CDT - Housing Starts & Building Permits(Jul)
7:30 AM CDT - Core CPI & CPI(Jul) |
|
| 08/20 Wed |
9:35 AM CDT - API & DOE Energy Stats
|
LT: Sep Crude Oil(NYM)
Sep Platinum Options((NYM) |
| 08/21 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Leading Indicators(Jul) 9:00 AM CDT - Philadelphia Fed(Aug) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
FN: Sep Coffee(ICE)
|
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!