Futures Trading Screen (Update): 4 Basic Indicators
Keep it simple, Stupid!
That adage ‘KISS’ says it all. When developing trading rules it’s important to keep our trading screens as simple as possible.
Architect Mies Van Der Rohe is famous for coining the phrase “Less is More.” In my prior post 16 Tools for Your Trading Screen, I talk about a lot of different indicators that I use. While these indicators are not “indicators” in the tradition sense. I still found them to be a distraction. I decided to take my own advice and continue simplifying my trading screen and limit the clutter.
Trading Screen Details
1. NYSE Tick
If I had to chose one tool to trade with it would be the NYSE Tick. This is my #1 trading indicator and tells us the relationship of stocks up ticking versus down ticking at their last traded price. I use the NYSE Tick to pin point my entry’s and exits.
You can read more about the NYSE Tick and setting up the market internals boxes in my post NYSE Tick & Breadth: Thinkorswim Chart Setup.
2. Market Internals
You will also notice the colored boxes in my NYSE Tick chart, these are my market internal indicators and consist of:
I use the market internals to give me a sense of the strength or weakness of the markets. While I don’t use them to execute trades exclusively, that can help determine whether or not it is likely to be a trend day or if the markets are likely to stay in a range.
As apposed to a traditional candlestick chart, I prefer to use a Heikin Ashi candle chart on the smaller 5-min, 233 tick, and 512 tick charts. This is because the trend changes stand out better and I can identify them easier.
Using a Heikin Ashi also helps reduce the number of false moves as I will pass on a long trade after a long series of red bars or a short trade after a long series of green bars. I try to enter as close to the trend change as possible.
Without getting into the formula behind Heikin Ashi, the main difference between it and a standard candlestick chart is the relationship to the prior bar. As a result I only use Heikin Ashi to define the trend, I do not trade off the candlestick patterns.
4. 15-min Chart
The go to time frame for my intraday trading. I use the 15-min as a reference throughout the day. I pay attention to the candlestick patterns and whether or not we have broken out of the first hours range, as staying within the first hours range is indicative of a chop day.
For a full detailed list of my trading rules and setups you can purchase my eBook Trading Rules for the ES & 6E Futures.
This is the only resource that I charge for on the blog and do so as a way to compensate for my time and efforts in putting together high quality, useful blog posts, responding to comments, and answering reader emails.
Remember to Keep it Simple! Thanks so much for your support.