Watch this video to learn a great forecasting technique. It will help you determine whether the day will be trending (heading in one direction for the most part) or whipsaw (full of choppy, difficult to trade, back and forth activity).
The E-mini S&P 500 (ES) experienced a trending day on February 27, 2013. At 1:17 in the video, you can see how price slowly climbed throughout the day. If you can know in advance whether the day will trend or not, your trading can greatly improve. The technique in this video works for many market opens, but the 9:30 a.m. US/Eastern market open is used. John Paul demonstrates how to split the trading day into three separate sections (A, B and C) at distinct times. Each section has its own characteristics as discussed at 3:40. The method – what to do with the A, B and C sections, is explained at around 5:20. In short, section A can tell you with reasonable certainty whether or not the day will trend. Using the ATR, you can position your profit target and stop loss. You will need to wait for price to prove where it wants to go – either two consecutive closes above or below the previous range. At 9:28 in the video, see what the Atlas Line produced for orders. Visit our videos page to see more videos or the Atlas Line page to see software that works for trading trends.