welcome to this video on day trading emini futures one of my favorite setups
that I look for every single day
this is very very reliable I mighty to add this to your treating arsenal
so here it is it is a volatility trade based on behavior of the traders that is
fairly darn predictable
so this is not one of those trades that's based on
oh you know some ancient Phoenician numerology or something that's esoteric
astrology or anything like that
this is based on the very real behavior of traders especially those and the
exchanges and on the floor and i noticed this when I was at the chicago
mercantile exchange was on the floor and you can take a real advantage that I
mean a lot of the pits are closed down now but i'm talkin back in the
the olden days when I was getting some training there and size down on the
floor of the mercantile exchange S&P pit and it was very obvious that people
would trade very actively during the morning and then they would go to lunch
and we all know this thats not telling you anything you don't know there but as
I was watching the e-mini futures pit
it was very interesting because most people know that general rule the
markets most active in the morning and then dies down in the at lunchtime and
then volatility can come back in the afternoon however it was very
interesting because when i was there you could literally and physically see which
traders were leaving and which ones were not and that's think that's a real
advantage it really has and so you can see whether you know the whales were
leavin or if they were staying in too early lunch sometimes they wouldn't
leave and then other times they leave and they come right back
and so it's almost like they're trying to fool people that they actually were
and because they knew they knew everybody knows this general pattern and
what everybody knows something guess what it's going to stop working so
sometimes they'd leave early sometimes they stay late
sometimes they come back to literally and so forth him yeah there's an
advantage in being able to
see that but if you're not trade at the the floor
no and I'm screen trader myself then there's a general rule that we can
follow and then we just have to watch the energies in the chart around that
time
so here it is and again this works for day trading emini futures but you can
use this for the day trading anything's really specifically for day trading not
for swing trading because it's based around the time of day and that is the
end of lunch time when people are coming back and they start treating actively
again
so here's how we would do it as a screen traders here's how I do it
so there is a little range of time
so these times down here these are California times because I'm in
California so that would be noon eastern so you can do this with stocks to buy
the way stock market works the exact same way
so this would be noon eastern and obviously then that's 11 central futures
mostly trade out of Chicago and so that's the big big big futures market
there and you're looking to for the market kind of flat here and to come
back in somewhere after ten o'clock is ten o'clock would be one o'clock east
rim
so this is your lunch hour if you want to call it that
now sometimes they take longer than an hour but it's usually after this time
and I'm looking at it anywhere from like about 10 15 -
before 11 so about 10 15 - 10:45 kind of that half hour zone is really the magic
zone that we're looking for
ok so if you look at this and we've done some recent videos on bollinger bands
and bullets are bands help you with this - because when the market state now and
go into low volatility and so you see the Bollinger Bands squeeze together
here is people leave a
very squeeze again here and then what we're doing is we're looking for an
expansion out of the contraction
that's the whole point after lunch is over around this time
so that's the setup now how do I we identify those trades well you can tap
whatever trading method you use whatever signals use whatever indicators you use
I don't have time to go into my whole trading method obviously in just a few
minutes here but so this is
that's one of the nice things about this is that you can really apply this to
whatever technical analysis method you use but i find using bullet demands
really helps you know what I'd be looking for here - Stevie a little
indication is you know first of all cycle hi this is a kind of an average
moment to exhaustion pattern here for us and then we look to trade in the
direction of the expansion and here for watching my previous videos on bollinger
bands the Bollinger Bands we get the lower one and they move away from each
other and that's a good indication of increased volatility in this direction
so that would be one example
ok let's go to the next day we'll just do a couple of days in succession here
and let's see look around that same time
alright so here we go and each one each setup will look a little different
that's the setup is not necessarily the same all the time
what is the same or we're looking for is an expansion of volatility
so here we get a cycle hi and then this is the this is the key here so this time
market comes back up makes another cycle high but does not touch the upper
bollinger band that shows weakness to the upside therefore we're looking to go
short also momentum is decreasing that momentum shift at the high before we'd
be looking to go short and that's exactly what happens
volatility comes in dramatically to the downside
see this is the thing about volatility it determines the range of your profits
and that's why this trade is so good is because you're trading inside of low
volatility and catching a new high
volatility movement in the market let's look at the next date
we like to catch these big momentum moves why because well a lot of profit
to the better reward part of the risk-reward ratio
all right here we go again around the same time now you could this one came in
a little earlier came right at the end of lunch time would be your signal and
you can't read this couple of different ways again made here we get our momentum
signal to go along comes up touches you
upper Bollinger Band all right and you can even wait to little later if you
wanted to and just take the first retrace on the trend here this ends up
going you know quite aways get a nice move again
big move in the direction of your trade which is good for profits
we like profits all right in here is yet another one
this would you look at this will be our last one because we already kind of late
here into this
so again notice the Bollinger Bands squeeze occurring we touch the lower
Bollinger Band we do not touch the upper Bollinger Band and then again
bollinger band they start to move away from each other we go into the lower
Bollinger Band we've got a cycle hi
we've got a lower momentum momentum shift here and that's our key to take
this in the direction down as it expands and again the pull move depending on how
long you want to stay in it
pretty good move right pretty good profits there so that's the idea is to
look for keys again a couple of tips there but you can use other methods as
well whatever your training method is to look for trades coming out of lunch for
increased volatility for some pretty nice big trades so that's when we had a
trade
emini futures you can use it with stocks as well of course
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it's a very simple strategy can learn it about
probably twenty six short minutes get that video explaining the trade strategy
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yeah