To learn about the YM, what is the key information I need to watch?
To be specific,
I want to learn the YM, watch for weeks and make observations and develop my own technique, strategy and approach. I'm having trouble identifying the key things that are relevant to an intraday ES or YM trader.
What tools/information do I need on my screen to make this prospect effective?
I.e. So far ---> Time/Sales window, Dom window, Tick chart and 60-minute chart and an awareness of news items. Do I need more? For example a type of volume analysis? Or moving averages? Pivot points? Yesterday high/low?
I am new to the concept of volume analysis: I.e. Auction Market Theory, Market profile, Volume profile etc etc ... What's best to place on my screen to understand this? Volume Profile?
What's important? What do I need to make practice effective?
Thank you to anyone who takes the time to respond,
All the best,
Last edited by TurismoTek; October 1st, 2014 at 05:07 AM.
Well first off I see you are in Europe, and one thing I have noticed is that the Euro and U.S. sessions do have quite a bit of difference in the way they are traded. So I actually omit overnight data(overnight for me anyway) from my back testing. The volatility is quite a bit lower during the Euro session, but I have actually woken up to trade the Euro market open, and there are some great breakout/momentum trades at the open for sure, as it usually consolidates through the Asian session. So my first bit of advice is to watch only the Euro session, to really get a feel for avg. size market moves in terms of profit targets and volatility. I would then build my strategy around those items to try to pull the most out of the market.
Here are some things I use for my own trading in the YM that work for me, but also seem to do well in this particular index.
10 EMA seems to hold 90% of market movement when it is trending. Seems to work on all time frames.
I do a drop down of the daily, 8 hour, 4 hour, 2 hour, 1 hour, 15 min, 5 min, 3 min, 2 min charts to get an overall feel for market direction, and large support/resistance levels. But I place most importance on the 1 hour chart as I generally trade from the 5 minute chart.
You will be amazed how much data you can get from a 1 hour chart with only a 10 period EMA, and a 20 period keltner channel. It is easy to spot when the market is trending, and when it is consolidating. And therefore, which direction you should be trading. The general rule I follow is that if the 1 hour ema is flat, then the 5 minute chart is going to be choppy as the larger chart is consolidating. And if the 1 hour ema is flat, but the keltner channel is trending higher, then chances are that the market will break out higher once the consolidation is over, and vice versa.
Trend lines built around the 1 hour chart seem to hold in the 5 minute time frame very well.
Building your strategy around the flow of the market makes it much easier to make some good money on the YM, as it tends to trend very well, and is easy to identify when it's not. In my opinion anyway.
I use pivot points, but probably in a different way than everyone else. I only have the central pivot point on my chart. I have found that all the pivot points and mid-lines actually cause me to doubt my trades if I am close to one, so I only pull up the pivot points after I initiate a trade to see if it falls in line with my profit target, and I will adjust it around that. But having the central pivot lets me know which side of the market I am on at all times. Plus I think it's the strongest pivot, so I want to make sure it breaks through one side or the other with certainty before I take a trade around it.
I also use a 30 period EMA on the 5 min chart, as this actually tracks the 10 EMA on the 15 minute chart which also seems to the hold the market very well when trending.
I have tried to go through some things I use that cover some points on your list. Volume analysis you can probably find in the search box. My advice is to learn as much as you can about the points of it that interest you, then try to apply it to your charts, and see if it fits into your strategy. I only watch volume on pullbacks to see if volume is falling vs. rising but that is just me. You will just have to watch the charts week after week, and I find that after I learn something new, certain things will just pop out at me on the chart that I never noticed before. And then I back test to see if it's something that happens often enough to be traded or can be integrated into my system.
Discipline, execution, journaling, psychology etc. are all important pieces of the puzzle to master on your way to day trading success. So search all of those things, and try to master each one to the best of your ability, and you will jump to the head of the pack(plus take some years off your learning curve).
I am new to this site, but the very first thread I read I imagine is one of the best, and is over the course of 5 years worth of info. Take a read.