E-mini futures products give active traders the ability to engage the world’s most popular contracts on a more manageable scale. Whether a trader is interested in crude oil, currencies, or the equities indices, the CME Group has an E-mini contract ready to satisfy almost any market-related objective.
In the active trade of the E-minis, technical analysis and the pricing chart reign supreme. By following a few simple steps, you can build a fully customized E-mini futures chart that’s specifically designed to complement your trading strategy.
Building an E-Mini Futures Chart
A few decades ago, pricing charts were created solely by hand. Traders physically plotted individual price points on graph paper using a pencil and straight edge. The result was a visual representation of the numbers traditionally expressed via ticker tape.
In the contemporary marketplace, charting applications automatically interpret live data streaming directly from the exchange. Pricing charts can be constructed in many different ways to address the trader’s specific needs and desires. Using the advanced functionality of a software trading platform, creating a chart from scratch is a relatively straightforward endeavor.
Selecting a Target
The first step in developing a useful E-mini futures chart is to select your target instrument. If you have no idea which product or strategy to focus your efforts upon, there is little cause for alarm. After a period of time spent studying charts, the ambiguities of price action lifts and opportunities begin to present themselves.
A good place to begin searching for an ideal target is among the most popular E-mini futures contracts available on the CME Globex:
|E-mini S&P 500||ES||E-mini Russell 2000||RT|
|E-mini Nasdaq 100||NQ||E-mini Natural Gas||QG|
|E-mini Dow||YM||E-mini Euro FX||E7|
|E-mini Crude Oil||QM||E-mini Copper||QC|
After selecting a product, deciding what type of chart to create is the next task. Chart type is a key element in the creation of a useful visual representation of pricing data. You must be able to easily read and interpret it within the context of your trading strategy.
Here are a few chart types commonly found in the technician’s toolbox:
- Open High Low Close (OHLC)
- Point And Figure
Each chart type is best suited to distinct styles of trading. Some trading approaches require that data be in a specific format in order to function properly. For instance, if a trader is interested in strategies involving traditional Japanese candlestick patterns, then a basic line chart simply won’t do.
Perhaps the single most important factor in constructing an E-mini futures chart is selecting the proper interval. A chart’s interval is the predefined period by which pricing data is grouped. Time increments and tick or volume counts are frequently used intervals.
In most cases, time is the preferred interval among active futures traders and investors. For intraday traders, durations ranging between 1 minute and 4 hours are typically referenced. Day traders rely heavily on daily charts, while swing traders and long-term investors consider weekly and monthly charts as being best-suited to their needs.
Studies and Analytics
After you decided on the product, type, and interval, you’re ready to add any desired analytical tools to the chart. This is the arena where charting becomes an art form and where creativity is often rewarded — the sky is truly the limit.
Indicators and studies are easily applied in accordance with the charting software’s supported functionality. Technical devices — such as Fibonacci expansions, moving averages, or Stochastics — are examples of tools that traders routinely add to an E-mini futures chart. These devices are helpful in the crafting of trade-related decisions.
Becoming an E-mini Chartist
The collection of E-mini equity index futures contracts offered by the CME Group is ideal for many intraday and day trading approaches. The E-mini S&P 500, E-mini Nasdaq 100, and E-mini Dow consistently exhibit the liquidity and volatility necessary to sustain profitability in the marketplace. Learning to chart these products competently is a great first step toward achieving your trading goals.
For more information on how to make technical analysis a part of your trading repertoire, schedule a free consultation with a member of the team at Daniels Trading.