The S&P 500 eMini is popular among the four eMini Futures for trading. Traders appreciate the S&P 500 eMini because trading operations offer a ‘middle ground’ compared to its strong brothers Dow-30, emerging leader Nasdaq-100 and hypertensive brother Russell 2000.
S&P 500 eMini (ES) trading You need to understand the market dynamics and feel where the price is going. Careful monitoring of ES daily price movements informs the trader about intraday price trends.
The value area is defined as the Price Range of an instrument in which 70% of yesterday’s volume was traded. The value area is important because it defines the existing ‘Comfort Zone’ where traders can easily trade under neutral bias.
Given the price area, it can point to the Daily Price Direction, taking into account the price movement. The value field for ES is accurate, especially in the Price Direction signal, because ES is the ‘middle ground’ eMini trading tool.
Intraday Price Trends are very useful for traders to quickly decide which trades to make during the day. The discussion of value field signals is coming.
80% Rule Alarm. 80% The rule is simple to understand and very reliable for determining market direction. When the market is above or below the Value Area and enters the Value Zone for two and a half consecutive hours, the market has a 80% chance of filling at least the Value Zone.
The trader has the opportunity to place a trade after the signal is activated and to move the price over the Price Zone before deciding to exit the trade.
Value Above Signal. When the market opens and stays above the value field, this indicates a very strong bullish trend. Institutional buying continues in the market and the market is rising even higher. A trader may try to market Value Area Top with dips before continuing his rally.
The value field is below the signal. When the market opens and stays below the value area, this indicates a very strong bearish trend. Institutional sales in the market continue to lower the market. You can sell to market rallies, for example, as an experiment under the Price Field, but you don’t want to trade for long when institutions sell.
Support / Resistance Signals. The bottom and top of the Value Area are excellent support and resistance levels. For example, if you were well above the Price Area, you would place a sell stop just below the top of the Price Area, because if the market enters the Price Zone, a strong bearish trend is indicated. If you want to buy and the market is below the Price Area, you would place your purchase order slightly above the Price Zone, because if the market enters the Value Zone, it indicates a strong bullish trend.
In addition, observing other eMinis as they approach the ES’s Price Area above or below can be very helpful in guiding a trader’s decision. For example, if the ES is inside the value zone, but only slightly below the top of the value zone, and the Nasdaq eMini demonstrates strength, the ES will penetrate to the top of the value zone and give a buy signal. If the Nasdaq shows weakness, the ES is more likely to fall above the value zone, which indicates an approach and Sales.
As a result, the S&P 500 is an excellent way to decipher the direction of the market, given the value-added movement of the eMini. The more a trader follows eMini’s Price Transaction to the Value Area, the better it “adapts” to the trader’s dynamics.