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Equity futures trading strategies

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equity futures trading strategies

May 29, by Dean Peters-Wright. This article will show you some of the most common trading strategies and also how you can analyze the trading and cons of each one to decide the best one for your personal trading style. The top five strategies that we will cover are as follows: Breakouts Breakouts are one of the most common techniques used in the market to trade. They consist of identifying a key price level and then buying or selling as the price breaks that pre determined level. The expectation is that if the price has enough force to break the level then it will continue to move in futures direction. The concept of a breakout is relatively simple and requires a moderate understanding of support and resistance. When the market is trending and moving strongly trading one direction, breakout trading ensures that you never miss the move. The expectation is that the price will continue moving with the trend and actually break the extreme high and continue. With this in mind, to effectively take the trade we simply need to place an order just above the high or just below the low so that the trade automatically gets entered when the strategies moves. These are strategies limit orders. It is very important to avoid trading breakouts when the market is not trending because this will result in false trades that result futures losses. The reason for these losses is that the market does not have the momentum to continue the move beyond the extreme highs and lows. When the price hits these areas, it usually then drops back down into the previous range, resulting in losses for any traders trying to hold in the direction of the move. This strategy is based on the fact that after each move in the expected direction, the futures will temporarily reverse as traders take their profits and novice participants attempt to trade in the opposite futures. These pull backs or retracements actually offer professional traders futures a much better price at which futures enter in the original direction just before the continuation of the move. When trading retracements support and resistance is also used, as with break outs. Fundamental analysis is also crucial to this type of trading. When the initial move has taken place traders will be aware of the various price levels that have already been breached in the original move. These are the levels that they will look to buy or sell from later on. Retracements are only used by traders during times when short term sentiment is altered by economic events and news. This news can cause temporary shocks to the market which result in these retracements against the direction of futures original move. The initial reasons for the move may still be in place but the short term event may cause investors to become nervous and take their profits, which in turn causes the retracement. Because the initial conditions remain this then offers other professional investors an opportunity to get back equity the move trading a better price, which they very often do. Retracement trading is generally ineffective when there are equity clear fundamental reasons for the move in the first place. Therefore if you see a large move but cannot identify a clear fundamental reason for this move the direction can change quickly and what seems to be a retracement trading actually turn out to be a new move in the opposite direction. This will result in losses for anyone trying to trade in line with the original move. ContributorsEducation Tagged With: BreakoutFeaturedtrading tradingPosition SizingShort Term Reversalstock retracementTrading LessonsTrading Strategies. ConnorsRSI is the first Quantified Momentum Indicator -- the next-generation improvement trading traditional RSI indicators. At Connors Research, we are using it as an overlay to many of our best strategies to make them even better -- now you can, too. Enter your email address to get your FREE download of our Introduction to ConnorsRSI - 2nd Edition - Trading Strategy Guidebook trading newly updated historical results. As the Trading Education Manager of tradimo. The Connors Group, Inc. About Careers Contact Us Testimonials Link To Us. TradingMarkets PowerRatings Connors Equity. ConnorsRSI Learn More About ConnorsRSI Recent Articles Store Equity Free First Chapters Free Newsletters PowerRatings Strategies the PowerRatings Algorithm Recent Articles. Home Articles Connors Research ETFs Options Stocks Volatility Contributors Larry Connors Kevin Haggerty Matt Radtke Education Connors Research Glossary Moving Averages Options Options Trading VIX Interview Archive Trading Lessons Videos Guidebooks Courses Newsletters Store June 24, Top 5 Popular Trading Strategies May 29, by Dean Peters-Wright. Have You Switched To ConnorsRSI? Company Info The Connors Group, Inc. About Us About Careers Contact Us Testimonials Link To Us. Properties TradingMarkets PowerRatings Connors Research. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are trading as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in strategies products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of strategies returns by that trader or system, and are not strategies of future returns which be realized by you. In addition, futures indicators, strategies, columns, articles and all other features of Company's products collectively, the "Information" are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Strategies, you should use the Information only as a starting point for doing additional independent research in order to allow you to equity your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. SIMULATED TRADING Equity IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. All analyst commentary provided on TradingMarkets. 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One of my Favorite Trading Techniques - Stock Index Futures Trading Strategy

One of my Favorite Trading Techniques - Stock Index Futures Trading Strategy

2 thoughts on “Equity futures trading strategies”

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