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Best Indicators For Day Trading Futures: A Girl’s Best Friend

Best indicator for futures trading

In this post I want to talk about a common question among traders, especially newer traders. And that is always, ‘what are the best indicators for futures trading?’.

The thing is, you don’t need many futures trading indicators!

I, personally, only use two indicators (a moving average bar and MACD’s). That’s all, these are open to the public and are free for everyone to use (on any platform). 

So apart from being simple to understand and use, they are also accessible to pretty much everyone and all levels of traders. And if you are looking to take your day trading to the next level and develop your trading skill as well as upgrade your knowledge, this course is the best place to start.

I, personally, only use two indicators (a moving average bar and MACD’s) that’s all, these are open to the public, are free for everyone to use (on any platform).

Related Read: Understanding Day Trading Indicators

Honestly, simplicity is key!

If you ever saw day trader charts some of them have more lights flashing and lines going through them than a crazy day on the Vegas Strip.

Why the distraction???

And, this is key, soooooooooo many academies and day trading schools will tell you require their software, or you get their indicators when you sign up with their classes and then once you stop paying them you either have to continue paying a monthly fee for the indicators/software or pay a huge lump sum to continue using them, BUTTTTTT, also need to pay for the upgrades and updates because they make them obsolete.

Honestly, whenever you hear that from an ‘expert’ or school, be super wary. There should be no reason why you can’t use indicators that are universal.

And below you will find out more about the best trading indicators for futures trading that I use and that are great for all levels as they make things simple.

Recommended Read: Emini Futures Contract Trading Strategy Made Easy

Moving Average 

As you know I like to keep things simple in my trading and believe that simplifying trading technical analysis and indicators is the best way to be consistent and of course be profitable in trading.

And the moving average is one of the best ways to ‘block out the noise’ and focus on more meaningful data in order to plan trades out.

Basically the moving average allows me to ignore the day-to-day price movements (which can fluctuate a lot) and just focus on the bigger picture price movement on a chart.

A moving average is calculated summing up the closing prices of the last x days and dividing by the number of days.

For a 100-day moving average, this would be plotted as the sum of the closing prices of the last 100 days and divided by 100 (which is the number of days).

Here are the best indicators for futures trading in my opinion
When it comes to the best indicators for futures trading, more is not always better.

MACD

The MACD is the other indicator I love to use and in my opinion one of the best indicators to day trading futures.

The MACD means the moving average convergence/divergence.

And in simple terms the MACD is a trend-following momentum indicator. The MACD shows the relationship between two moving averages of a price. 

The MACD is useful to use to identify entry and exit points for trades.

As with any indicator, the MACD is not perfect and you should choose indicators that you can easily use and understand. And one of the disadvantages is that the MACD is a short-term indicator. 

But even so I still love using the MACD in my day trading.

Other Useful Indicators

Now there are many different options when it comes to indicators for trading futures. And while I like to  keep things simple and stick mainly to the moving average and MACD I would like to  point out a couple more very useful indicators you could look into.

The first are bollinger bands.

There are pretty complicated formulas for calculating bollinger bands but for traders they are used to identify high and low ranges from the average price and can help to chart out entry and exit points for your trade.

The second would be the RSI.

The RSI or Relative Strength Index helps to identify overbought or oversold assets. And usually an RSI above 70 can be seen as overbought with high potential for a reversal and an RSI below 30 is considered oversold and could be ready to reverse.

Futures Trading Charts

610 and 1597 chart with indicator for day trading
The 610 chart and 1597 charts with the moving average and MACD indicators.

Now when it comes to futures trading charts – this is something totally different from indicators. And no school or academy sells chart softwares, at least none that I am aware of, as this is usually independent of the indicators used on the charts.

Personally I use two different charts. And I don’t use time frames but tick bars. Tick bars are useful for measuring transactions rather than minutes or hours on a chart. And I would say it’s more precise and easy to measure. (In the photo above you will see the 610 chart and 1597 charts)

The line in the middle is the moving average, and the little red balls at the bottom are the MACD’s.

Best indicators for futures trading: Summary

Really, the best indicators for futures trading are ones that make sense for you and ones that you can easily understand and use. 

Of course it’s useful to have a starting point, and that’s why I wrote this post so you can get an idea of what someone who is profitable in day trading and has experience with futures trading, uses in their ‘toolbox’ of indicators.

And as you can see I like to keep things simple, and I always say that simplifying your approach to day trading technical analysis and indicators is the best way to become a consistent and profitable trader.

My final advice would be to not take what I say as the only way. The moving average and MACD work well for me (and many other traders) but you may find the RSI and bollinger bands work well for your style and you understand them better.

So practice, backtest and try out different indicators and journal your trades and see what works best for you.

And again the best indicators for futures trading for you are those that work best for your preferences and style of trading.

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Related Post: How To Do Futures Technical Analysis

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