A very popular trading technique is divergence trading.  A divergence is where a futures contract may have a higher price on a second peak, but the indicator may show a lower price.  This described as a Classic Divergence.  We will discuss Hidden Divergences in another post.

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How to Use Pivot Points with Support and Resistance

We have attempted to give you a background in trading.  Overall I learned to trade from Dr. Alexander Elder’s Book and Workbook, “Trading for a Living” back in 1996.  I actually failed the tests in the workbooks several times before I got it right.  I still think that that book is a classic and in a class all by itself. 

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Moving averages are one of the oldest trading tools. Futures traders use moving averages to reveal the underlying trend behind short-term price variations. Moving averages are a valuable indicator that can be used with other indicators to trigger buy signals. (more…)

“Back up and look at the big picture.” That’s good advice for futures traders. Moving averages help us sort through sometimes chaotic price variations to see what is really happening in the market. Moving averages allow us to see the forest through the trees. By stripping away price volatility by removing both unusually high and low price variations from consideration, moving averages show us the actual underlying trend.

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Moving averages are one of the oldest trading tools. Futures traders use moving averages to reveal the underlying trend behind short-term price variations. Moving averages are a valuable indicator that can be used with other indicators to trigger buy signals.

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Popularized by legendary futures trader George Lane, the stochastic oscillator (commonly called stochastics) is a timing indicator widely used by futures traders to indicate overbought or  oversold positions. Stochastics compares closing price to price range over a specified time period. The driving principle can be summarized as follows: (more…)

Futures traders come in all flavors but it’s basically a Neapolitan world. You can be a scalper, swing trader or a combination trader. Mindset and methodology generally determine in which sector of the futures trading world you’ll thrive.

Scalpers. Scalpers seek immediate gratification. They look for short-term market movements seeking to shave money off the bid/ask price spread. Holding each position for only a  very short period of time (often only minutes) to minimize risk, scalpers make small gains through rapid trading. (more…)

Futures contracts are complex financial instruments and trading them demands constant daily, even hourly, monitoring. When you trade futures, there are myriad shifting variables that must be monitored continuously. Trading futures is about minimizing risk and maximizing profits. Profits are often made on small price points in an interval of minutes. To make money, you have to be there, in the game, ready to grab an opportunity when it appears.

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Retracements are a key charting tool used by futures traders to predict price movements and select entry points. The key value in retracements is that they keep the successful futures trader grounded in reality. They provide traders with an objective view of actual market movement. They help futures traders keep their hopes and fears in check and deal with market movement dispassionately.

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Knowing when and how to make your entry point is the key to a profitable trade. Many of the losses you suffer as a futures trader will be directly linked to poorly-timed or ill-placed entry points. Choose your entry point unwisely or time your entry poorly and you can turn a sound trade into a loss. Conversely, doubtful trades can come up winners when entry occurs at the proper point and time. The entry is the most critical part of any trade. The trick is in knowing when to strike.

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