Which Market Should I Trade
I am often asked why I focus on the ES eMini SP’S. There are so many markets out there many with greater volatility than the mini SP 500, so why does TheTradingZone focus on this particular market.
The truth of the matter is; a market is, is a market… It really makes no difference which market you trade.
I firmly believe that a little education in this business of day trading goes a long way. Going into my 8th year as a trading educator I can tell you that I have seen the same mistakes repeated over and over again.
If I can share with you 1 piece of advice, just One Thing that may improve your trading then it will be well worth the effort of reading this article.
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Here is my point:
Choose 1 market, watch it, evaluate it, get to know it. Find out when it is quiet, when it is volatile, when the floor traders or most active groups take a break and go for lunch, see how it acts on news events…
A good trading method can and should be able to be used on various markets, even though a particular market has a particular personality based on the active participants, making small tweaks or adjustments should allow a methodology to be transported from 1 market to another.
However this is where I have seen most traders fail. They fail to recognize that by going from the GC (gold) market to the CL (crude oil) market, the participants that make up each of these markets is separate and distinct. And for that reason each will necessarily have its own personality, a personality that reflects the overall or comprehensive personally of all those participants.
For instance, the eMini SP does tend to get very quiet during the 11:30 am to 1:30 pm EST time. The reason behind this is simple; traders like most human being like to eat lunch. The floor traders, the screen traders, the brokers and even the large institutional traders are no different.
I have often seen a newer trader become impatient and frustrated with the fact that the market is not moving and jump into another market. I have witnessed traders leave the SP’s and say this market is too slow, I am going to trade the DAX to get some more volatility. I have seen this happen when the DAX is officially in its overnight session typically the lowest volume for that market, and the trader had no idea..
By trading 1 market, or at the very least 1 market at a time, you will train yourself to recognize when that market provides the most or best volume volatility combination. As a newer trader who is just starting out, jumping from one market to another is sure to lead to confusion and never allow for the “getting intimate” period that I believe is an essential relationship between a trader and the market he or she chooses to trade.
That having been said, I will repeat what I mentioned earlier. A good trading system or method should be transportable and tradable on various markets.
At the core of Every Market is the concept of Market Profile. By far the single best and most impressive indicator I have come across in my 18 years in the trading business.
Below I have included some charts of a few different markets using our Market Profile Overlay Indicator.
STEP 1 - Choose a market you want to trade, make sure it offers volume and volatility and that you will be trading it during it’s active hours
STEP 2- Learn all you can about this market, watch it, study it, become 1 with it
6E EUR/USD with market profile on 10 minute chart
CL Crude Oil with market profile on 10 minute chart
FESX Eurostoxx50 with market profile on 10 minute chart
Learn More about using Market Profile in any market. Join us for a trial
Learn More about using Market Profile in any market. Join us for a trial
Category: Market Commentary, Trading Articles
