Learn to Day Trade - Get Free Mini Course

How To Do Futures Technical Analysis




Full Transcript

Technical analysis for Futures Trading

I will do technical analysis for futures trading and start giving quick recaps of the way the market moves and understanding how to read the market and also what I do with the market. So this is a February 6, Monday recap.

Now I start at eight-thirty because I am on Central Time. So this is where I put in my line, which is nine-thirty Eastern. The first thing I do before I go anywhere is check to see if there’s any news. And February 6, there was no news.

So that means I could just start trading after I have completely done all the prep work. Usually, I don’t start trading until at least 15 minutes into the market because the first 15 minutes kind of the amateur hour is called, and it’s just a lot of indecision. Right. Traders don’t really know what’s going on yet. They’re all kind of seeing what’s happening.

So before I start to do that, this is what I’m seeing. Right. And I always do my areas to see what happened the day before the session before. And now I am moving in the live market. So as I said, I don’t even really consider entering any trades until around nine forty five Eastern Time. Right.

So as you can see, this is a slow grind-up. However, it is showing me that the market is starting to trend upward. And when I see this strong move, I see that there’s no divergence. That is pretty high up on the MACD indicator lines as some other indicators that I use. I only used three indicators that these EMA lines and the MACD;s or I, so I use these three EMA lines together and then the MACD.

Recommended Read: Type of Trends In Trading

So when I see this breakthrough right here, I see that I am still above point three even almost point for the line. This is where I entered my treat, right?

It was right here.

And then my first target area I usually have at five ticks, which is right around here, which gives me about sixty two dollars and 50 cents per contract. So as you can see here, it bumped it, but it did not feel me there.

So then gratefully continued on, even though my risk was around here, it never sunk that deep. I just had to trust because everything else is telling me it’s going up. This is a skill, a higher low. And then it went up and I finally was built around here. And now I’m just watching the market.

Related Read: Advantages Of Trading Futures: Is Futures Trading Worth It?

Divergence appear

And at this point, I’m seeing divergence. So I stay out of the market now. I like to have my trading areas drawn because the market has a very strong tendency to repeat itself and to hit certain areas. So look what happened here. It kind of started to head back down. Right.

And this was my other entry right here. And again, my first target is right here, which had hit really quickly. All right. So after that, I’m just now because, again, I’m seeing divergence. The market is really going very far at this point. I’m seeing that the pivots are here and I do have a small resistance area.

Round here and what I’m doing, because this pivot didn’t hit it, I do raise this. I’m sorry. This is a support area. And I do bring it over to here. I only trade for about two hours a day.

Related Read: Understanding Contract Roll Over Day for ES Minis

Waiting for the Right Entry Time on my Day Trading Charts

At this point, I’m almost at the 10:30 mark, which is almost a lot, which is 11:30 Eastern, which is close to lunch. And during lunch, that’s when, you know, a lot of traders leave, a lot of traders take at least two hours lunches. It’s a very taxing thing to do.

So at this point I’ve already got 10 ticks, which is one hundred and twenty-five dollars per contract. I was trading with two contracts, two hundred and fifty by this time, and I’m just done because I don’t like to go where there’s stay divergence. And this is where I finished, right.

As you can see, the market continues on and for the most part, it actually just kind of hangs out in a sideways movement, so, you just need to wait for the right time to trade.

So it’s a good thing I got out because it finally broke through around lunchtime area, but not even. So this was the first breakout and at that point is already 1 o’clock and I was finished for the day.

So this is what a typical market movement looks like. And understanding that sideways markets you don’t touch breakouts is when you are all over it, because that’s when it’s showing you that, yes, the market wants to continue this.

Recommended Read: Trading Sideways

technical analysis for futures trading

How to start

If you have any questions about technical analysis for futures trading you can always ask me at traderchick.com and if you want to learn more trading strategies – check out Day Trading Courses.

If you want to learn more about my journey and how I started day trading you can read it here or you can watch on my YouTube channel.

technical analysis for futures trading