Emini Future Trading
Learn About Trading Zones 

Emini futures trading has always been popular, and the number of people trading eminis has only increased due to the pandemic.  Successful emini futures trading requires knowledge and experience, as most new traders discover rather quickly. 

Successful traders try to quantify the market and one of the things they try to determine is the price range each day.  Where will be the high, the low, the range? They want to know, if possible the trading zone.  By knowing where the trading zone is, these traders know important price levels to watch for, such as support and resistance, among other factors.  Armed with this information, experienced traders are able to trade more successfully than novices, who typically trade without market know-how.

How do you determine the day’s trading zone and how did it come about? Trading zones are a product of George Taylor’s “Book Method”. By studying market movement over time, he saw that markets trade in cycles. Taylor’s method is quantified by calculations that result in buy and sell envelopes. In short, these envelopes are support and resistance levels, which theoretically determine the limits of tomorrow’s prices and have proven accurate during trending markets.

But it’s not that easy. The day’s trading zone is based on the calculation of averages of the previous several days – the high, low, and close. That implies that the zone will be fairly accurate if the current trend continues. If not, then prices will completely disregard the zone.

So, if calculating the zone for the day a waste of time? Not at all, because the more that can be determined about price movement, the better the results. It’s all up to the trader to know when to use the information and when to disregard it.

Successful trading is an extremely valuable skill, but one that requires education, and one of the building blocks of a trader’s knowledge is knowning the day’s trading zone. Trading is a skill that can be learned, like everything else. Learning about trading zones is just one of the things that successful traders need to know.

Nothing in this life is a guarantee and trading is no different. You have to study, you have to learn, and you have to practice just like any other skill you want to master. 

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