Some people may wonder technical analysis futures trading is the same regardless of the market in which you trade. At first, the answer may seem so. After all, most technical analysis is based on information obtained from a contract. However, there are at least a few differences between the technical analysis of the futures market and any other market that can be considered.
Futures are traded in contracts relating to a certain rate and amount of the item represented by the futures contract. And it can be delivered at a later time in the future, as determined by the month of the contract.
This is very different from stock trading. We know that a company’s stock represents the company’s capital. But we have no idea what the part really represents other than the dollar value.
Technical Analysis for the Future
As we said, does this mean that we cannot use the same technical analysis in futures as in other markets? After all, so much technical analysis provides the same indicators that can be used for futures trading platform, stocks or Forex. But that means there is something similar between the markets, right?
Fortunately, there is a basic premise similar to all of these markets (futures, stocks and Forex). People just come together to buy or sell something. The value of what is traded can be determined with absolute certainty at any time.
Because this is the case (and technical analysis is the basis for futures trading decisions), we can create a price chart based on the movements of people in these markets at any point in time. So the question is, why might the actions of these traders be important enough to schedule?
Well, if the main catalysts that drive these markets can be found in the actions of the people involved, then we can begin to rationalize what these people are doing or the value of what they are buying and selling. get up or fall. Although we cannot really say what these people think, we can say what they did.
This is the cornerstone of technical analysis for me. One of the best ways to connect market psychology to price fluctuations is a method called Elliott Wave. I’ve learned this for years and I would never trade without it.
Although there is no magic bullet in trading, applying Elliott Wave in my trading has allowed me to trade with a market trend instead of fighting against it. And as a result, I feel I can control my emotions in my trading.