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Life after mini SP 500…..Other markets for daytrading 3.21.2017

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With stock index futures trading at historical LOW volatility, I thought this would be a good time to share something I wrote last year about “other markets to day trade other than the mini SP…..” 

Each market has a different personality, different behavior along with different times of the day when it is most active. If you are finding that the ES (mini SP)  is not giving you enough risk/opportunities then start monitoring a couple of other markets and perhaps explore them in demo / simulated mode. 

I think that there are more than a few markets that are suitable for day-trading. Below you will find some observations, tips along with what are unique about these markets, personality and most active trading hours. 

Interest rates Futures:

In most platforms, the symbols are ZB for 30 year bonds and ZN for 10 year notes. 

Product Symbol
ZB
Contract Size
The unit of trading shall be U.S. Treasury Bonds having a face value at maturity of one hundred thousand dollars ($100,000) or multiples thereof
Price Quotation
Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points.
Product Symbol
ZN
 
Underlying Unit
One U.S. Treasury note having a face value at maturity of $100,000.
Deliverable Grades
U.S. Treasury notes with a remaining term to maturity of at least six and a half years, but not more than 10 years, from the first day of the delivery month. The invoice price equals the futures settlement price times a conversion factor, plus accrued interest. The conversion factor is the price of the delivered note ($1 par value) to yield 6 percent.
Price Quote
Points ($1,000) and halves of 1/32 of a point. For example, 126-16 represents 126 16/32 and 126-165 represents 126 16.5/32. Par is on the basis of 100 points.
Tick Size
(minimum fluctuation)
One-half of one thirty-second (1/32) of one point ($15.625, rounded up to the nearest cent per contract), except for intermonth spreads, where the minimum price fluctuation shall be one-quarter of one thirty-second of one point ($7.8125 per contract).
Contract Months
The first five consecutive contracts in the March, June, September, and December quarterly cycle.
 

These contracts are often affected by many of the economic reports that come out at 8:30 AM Eastern and there is very active volume between the hours of 8 AM EST and 3 PM EST

Volume on both contracts is very good.  Ten years will often have 1 million contracts traded per day (might be the second most active US futures market after the mini SP 500) and the bonds will avg. around 300,000 contracts.

These markets can experience very volatile movements during and right after different reports but then will often trade smooth or in an intraday trend the rest of the day.

Currency Futures Markets

I personally prefer currency futures over FOREX any day. For more than a few reasons but the main ones are: currency futures trade a regulated main exchange (CME) while FOREX trades through different interbanks and other means of transactions that are not necessarily regulated. FOREX are “commission free” but in reality there is a spread built in that dealer marks up each time you buy or sell which makes FOREX more expensive to trade than futures.

The main ones I like to follow are:

The Euro , The Yen, The British Pound, The Australian. All are paired versus the US$.

Each market will have different times of higher volume which can allow for traders in all time zones to pick their market. Simply open an hourly chart and add the volume indicator to observe what times the market has the most action.

  • 1 Euro tick is $6.25
  • 1 Yen tick is $12.50
  • 1 Aussie tick is $10
  • 1 British tick is $6.25

Currency futures will often trend better than other segments and will experience different levels of volatility during economic reports in the different parts of the world.

If you plan on following any currencies, start in demo mode, know what reports are coming that affect the specific currency you are trading, take a look at the daily, weekly charts to get a feel and monitor the action for a while.

Crude Oil and Gold Futures.

More than a few similarities between the two markets.

They are both volatile and can move VERY fast. I have seen some very large moves happen in matter of minutes if not seconds. The “fear & greed” factor really plays a role in these specific two markets.

Both have active trading hours starting with Far East trading around 10 PM EST all the way to the next morning until about 3 PM EST. Good volume generally speaking but not close to the mini SP or Ten Year notes. So you may see some slippage on stops but the volume is more than enough to trade size.

Each tick in Gold is $10, so every dollar move =$100 against you or in your favor.  Crude is similar, each tick = $10. One full $1 move = $1000.

I like using overbought/ oversold indicators on the two markets as well as using range / Renko charts.

Would you like more information? Perhaps a second opinion on your trading methods? Request a free consultation with a licensed , series 3 broker.

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.

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Futures Trading Levels

Levels for Trade Date of 03.21.2017

Contract June 2017  SP500 Nasdaq100 Dow Jones Mini Russell Dollar Index
Resistance 3 2386.00 5463.50 20977 1401.33 100.76
Resistance 2 2381.00 5445.75 20939 1395.67 100.51
Resistance 1 2375.50 5431.50 20900 1389.63 100.33
Pivot 2370.50 5413.75 20862 1383.97 100.08
Support 1 2365.00 5399.50 20823 1377.93 99.90
Support 2 2360.00 5381.75 20785 1372.27 99.65
Support 3 2354.50 5367.50 20746 1366.23 99.47
Contract Apr. Gold May Silver May Crude Oil June  Bonds June  Euro
Resistance 3 1243.6 17.60 50.28 150 14/32 1.0873
Resistance 2 1239.5 17.54 49.82 149 26/32 1.0850
Resistance 1 1236.9 17.49 49.38 149 16/32 1.0821
Pivot 1232.8 17.43 48.92 148 28/32 1.0797
Support 1 1230.2 17.38 48.48 148 18/32 1.0768
Support 2 1226.1 17.32 48.02 147 30/32 1.0745
Support 3 1223.5 17.27 47.58 147 20/32 1.0716
Contract May  Corn May Wheat May Beans May SoyMeal April Nat Gas
Resistance 3 374.2 446.1 1016.17 333.87 3.31
Resistance 2 371.8 442.4 1012.33 332.33 3.20
Resistance 1 367.7 436.3 1005.92 329.47 3.14
Pivot 365.3 432.7 1002.08 327.93 3.02
Support 1 361.2 426.6 995.7 325.1 3.0
Support 2 358.8 422.9 991.83 323.53 2.84
Support 3 354.7 416.8 985.42 320.67 2.78

All times are Eastern time Zone (EST)

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

Date 3:47pm Currency Impact Detail Actual Forecast Previous Graph
TueMar 21 5:30am GBP
CPI y/y
2.1% 1.8%
GBP
PPI Input m/m
0.2% 1.7%
GBP
Public Sector Net Borrowing
2.9B -9.8B
GBP
RPI y/y
2.9% 2.6%
GBP
Core CPI y/y
1.7% 1.6%
GBP
HPI y/y
6.4% 7.2%
GBP
PPI Output m/m
0.3% 0.6%
6:00am USD
FOMC Member Dudley Speaks
All Day EUR
ECOFIN Meetings
7:00am GBP
CBI Industrial Order Expectations
6 8
8:30am USD
Current Account
-129B -113B

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 judgement in trading.

Tags: > Posted in: Future Trading News  

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