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Micro E-mini S&P 500 Index FuturesMicro E-mini S&P 500 Index FuturesMicro E-mini S&P 500 Index Futures

Micro E-mini S&P 500 Index Futures

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MES1! trade ideas

Strength in NQ futuresHi Fellow traders I'll be starting my regular post of my bias of the market. Using Futures market as a indication of potential strength and weakness of the market. Bias will be bullish into the open on NasDdaq as you can see from the comparison of Nasdaq VS S&P that there is a bullish divergence between NQ and ES. which is in alignment with the higher time frame draw Specifically Long Nasdaq > S&P My prediction would be that market will open to push for higher high
CME_MINI:MES1!Long
by ZanderGoh
Use RSI Like a GoldmanYou might be wondering, do the traders at Goldman Sachs use the Relative Strength Index (RSI)? The answer is, perhaps they do, and perhaps they don’t. However, based on my experience, I can confidently say that even the most seasoned and professional traders rely on RSI from time to time. While it may not be their sole tool for decision-making, it’s often included in their broader strategy due to its effectiveness in identifying overbought or oversold conditions in the market. RSI is one of many technical indicators that can serve as a helpful signal in navigating market trends, and even the best traders find it useful on occasion. When trading with technical indicators like the Relative Strength Index (RSI), having a clear and structured approach is crucial to maximizing its effectiveness. While RSI can be a powerful tool for identifying potential trend reversals, it’s essential to understand the right conditions and context in which to use it. Below are some key principles and guidelines that can help you apply RSI more effectively in your trading strategy. Whether you’re a swing trader or a day trader, these tips can help you avoid common pitfalls and make more informed decisions in the market. ⚙️ Keep Settings Simple Keep the RSI settings minimal to avoid confusion. Stick to the standard 14-period lookback, which is widely used and reliable for most market conditions. 📉📈 Ensure Divergence Occurs Outside of Key Levels Divergence should only be considered when the RSI reaches extreme levels, typically above 70 (overbought) or below 30 (oversold). This helps to identify potential trend reversals. Divergence at neutral levels (like between 40–60) may not be as effective. 🔥 Base Divergence on Candle Closes, Not Wicks Always look for divergence based on the closing price of candles. Divergence created by wick movements is unreliable and can lead to false signals. Stick to the body of the candle to ensure accuracy. ⏳ Watch the Lookback Period The RSI’s default lookback period is 14, and divergence with a gap of more than 14 candles is generally less reliable. Wider gaps often signal weak price momentum and a higher chance of failure, so focus on shorter, more recent divergences for better results. 💧 Liquidity Must Be Taken Before Entering Trades Liquidity is essential when confirming trade setups: The first high or low should take out liquidity from higher time frames (such as range highs and lows). The subsequent highs or lows should take out local liquidity, which can be identified by overbought or oversold RSI conditions. Ensure there’s a clear market structure shift before entering trades. ⏰ Timeframe Considerations for Different Trade Types For swing trades, focus on longer timeframes like the 4-hour chart to capture larger market moves and trends. For day trades, the 15-minute timeframe is ideal for capturing short-term price action and finer market details. 🔄 Use Divergences for Trend Reversals, in Confluence with Other Analysis RSI divergence is best used to identify potential trend reversals. However, it should not be used in isolation. Always look for confluence with other technical analysis methods (such as support/resistance levels, moving averages, or candlestick patterns) to increase the reliability of the signal. Combining multiple tools enhances the accuracy of your trade setups. Stay sharp, stay ahead, and let’s make those moves. Until next time, happy trading!
CME_MINI:ES1!Education
by CandelaCharts