Understanding how to trade using key moving averages provides traders with an important tool when looking for trading opportunities. The most widely used moving average periods are the 20, 50 and 200. Moving averages (simple, exponential or smooth) help identify support levels in uptrends and resistance levels in downtrends and can be applied to any chart with any time horizon. In the case of a downtrend, traders can enter a short position on the second period candlestick after the moving average resistance level has been confirmed. A stop-loss should be placed just above the moving average. As long as they are acting as resistance, the downtrend should continue until prices break above the moving averages.
A consolidation pattern (pennant, flag, rectangle,…) is a very useful tool used to find good entry areas in the market. From a psychological point of view, these tools point to an ongoing debate between bulls and bears that will most likely be won by the bullish or bearish consensus that preceded the pattern. More concretely, a bullish/bearish consolidation pattern emphasizes that buyers/sellers are taking advantage of any dips/recoveries to consolidate their initial positions. Also, the opposite camp is realizing he’s wrong and tries to sell their open trades. Once the pattern is confirmed, the wait-and-see traders jump in on the move. To conclude, when a bullish/bearish consolidation pattern is validated, three categories of investors will join their efforts to buy/sell the market, making it stronger.
A quarterly listing of CME Group's leading futures and options contracts. Shows the top contracts in terms of average daily volume and open interest for Interest Rates, Equities, Energy, Foreign Exchange (FX), Agricultural Commodities and Metals. This resource also includes information on recent product launches and global partnership data.
This quarterly guide features a listing of top futures contracts by ADV and top options contracts by ADV.
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