Futures trading is done by two main parties, one of which is the hedger and the other one is the speculator. Where a speculator is there to trade for either their own accounts or that of their clients, a hedger always uses futures as a possible protection from losses. Hedgers can also be described as individuals or business owners who are more risk averse. Speculators and hedgers are likely to benefit from futures trading if the trader has a strong ability to analyze the markets and understands that future behavior. Though futures can behigh risk, they offer an equally high return and are thus very tempting.
In case you are new to futures trading you need to understand how things work. We at Cannon Trading are there to help with your understanding of all the elements of futures trading and also counsel and advise you with the same. Our knowledge base featured on our website, is a store house of information. In order to know every aspect of futures trading, you must read through these articles that have been listed in this category archive. Go through it and get better informed!
About 6-7 minutes video is now posted on how to use the trailing stop feature in our AT ( Active Trader) platform, along with small example of how I use overbought/ oversold conditions along with support and resistance to enter trades.
Any feedback is welcomed as we plan on producing additional educational videos
2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000
With stock index futures being relatively quiet, I am sharing a daily chart of March Crude Oil futures where volatility is still present.
My outlook on the daily chart is that a break above the trend line seen ( 100.34) can trigger more upside potential. On the other hand failure and a break of 98 going down can trigger new lows.
I am being asked by clients and prospects what do I use for Intra-day support and resistance levels and the answer depends on a few factors like the time frame one trades, risk -reward applied to each trade, personality of trader and much more.
Below is 3 different studies I use for intra-day support and resistance.
All these studies and screen shots are from our ATcharts ( sierra charts) which active clients can get for free and prospects can have a 30 days free trial.
1. For charts of 15 minutes and lower time frames, tick charts, volume charts etc. I like to use the variable pivot levels found in ATcharts from the study menu. I then click on settings and set the variable period to 60 minutes. Here is what it looks like on a 3 minutes chart of the Crude Oil from today:
Market Commentary
2. Another tool I use for the lower time frames is the Fibonacci Auto retracment, again this is a built in study in the ATcharts. The chart below if mini SP , 10000 volume chart from earlier this morning. WHat I like about the auto fib is that the nature of the formula takes in the days ranges as the market develops.
ATcharts
3. For time frames of 15 minutes and larger, like 30 minutes chart, hourly etc. but smaller than a daily chart, I like to use the simplified levels of market profile, called TPO value area lines in the study menu of sierra charts. The one below shows these levels on an hourly chart of April gold from today:
RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.
