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3 Points to Futures Trading Psychology & Economic Reports 7.25.2014

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Many different ways to make and lose money trading futures, even more so when day trading.

Today’s action in stock index futures led me to write about:

Three main approaches out there in my opinion.

  1. The first is what I call the “trend is your friend”. A trader looks at few different time frames, looking to see if there is an established trend on longer time frame (example 60 minutes chart) and then trying to look for pull back on lower time frames and “join the trend”. Only works for certain markets and only works few times of the month as most days markets do not have an intraday trend.
  2. Second method is what we call break out. Traders will look for markets that have been in a lower volatility situation using indicators such as ADX for example. Then they will look at the chart to find what they feel are levels that if broken can fuel a stronger move in the same direction. These levels can be extracted visually looking at the chart or using highs/ lows of X periods. This method works better on some markets than others. I noticed that crude oil and gold futures tend to have better chances of a continued breakout move than the mini SP 500 for example.
  3. The third one many traders use and believe in is “mean reversion”. Stock index futures in my opinion will fall into this category many trading days and today’s session ( July 24th 2014) was a good example. Market tested yesterday’s highs, then tested lows and traded in between. Traders will sometimes use RSI or Williams %R to get a feel for when the market gets away from the mean and will use counter trend methods in this case. Use of stops when counter trend trading is even more important as you do NOT want to get caught on the few days a month when these markets do incur a break out situation…..

Obviously, all methods have good days, bad days and I guarantee you, none of these methods work all the time on all markets. Knowing the above and trying to understand what method should be the primary method for the market YOU trade and which can be used as secondary can help you while trading.

 

If you like the information we share? We would appreciate your positive reviews on our new yelp!!

GOOD TRADING !

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.  Past performance is not indicative to future results.

If you like Our Futures Trading Daily Support and Resistance Levels, Please share!

Futures Trading Levels

Contract Sept. 2014 SP500 Nasdaq100 Dow Jones Mini Russell Dollar Index
Resistance 3 1995.42 4013.25 17135 1173.27 81.20
Resistance 2 1990.58 4002.25 17099 1167.43 81.09
Resistance 1 1986.42 3990.25 17061 1159.87 81.03
Pivot 1981.58 3979.25 17025 1154.03 80.92
Support 1 1977.42 3967.25 16987 1146.47 80.86
Support 2 1972.58 3956.25 16951 1140.63 80.75
Support 3 1968.42 3944.25 16913 1133.07 80.69
Contract August Gold Sept.Silver Sept. Crude Oil September Bonds Sept. Euro
Resistance 3 1321.3 2144.0 104.35 139 11/32 1.3534
Resistance 2 1313.5 2120.5 103.83 139 1.3510
Resistance 1 1303.2 2082.0 102.92 138 12/32 1.3487
Pivot 1295.4 2058.5 102.40 138 1/32 1.3463
Support 1 1285.1 2020.0 101.49 137 13/32 1.3440
Support 2 1277.3 1996.5 100.97 137 2/32 1.3416
Support 3 1267.0 1958.0 100.06 136 14/32 1.3393
Contract Dec Corn Sept. Wheat Nov. Beans Dec. SoyMeal Dec. bean Oil
Resistance 3 386.7 529.5 1117.83 368.97 36.93
Resistance 2 381.3 529.3 1108.92 363.73 36.82
Resistance 1 375.4 529.0 1096.83 356.87 36.58
Pivot 370.1 528.8 1087.92 351.63 36.47
Support 1 364.2 528.5 1075.8 344.8 36.2
Support 2 358.8 528.3 1066.92 339.53 36.12
Support 3 352.9 528.0 1054.83 332.67 35.88
Economic Reports

source: http://www.forexfactory.com/calendar.php

All times are Eastern time Zone (EST)

Date 3:58pm Currency Impact Detail Actual Forecast Previous Graph
FriJul 25  2:00am EUR GfK German Consumer Climate 8.9 8.9
4:00am EUR German Ifo Business Climate 109.6 109.7
EUR M3 Money Supply y/y 1.1% 1.0%
EUR Private Loans y/y -1.8% -2.0%
8:30am USD Core Durable Goods Orders m/m 0.6% 0.0%
USD Durable Goods Orders m/m 0.4% -0.9%
9:00am EUR Belgian NBB Business Climate -6.5 -6.2

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 here in 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.

 

Tags: > > > > > Posted in: Future Trading News   | Futures Trading   | Trading Guide  

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