How to Recognize S&P Emini Futures Price Action Patterns
Day Traders need to be able to recognize common price action patterns
S&P Emini futures are one of the most popular commodities traded on the CME Globex electronic trading platform. As a day trader, it’s important to be able to recognize common price action patterns so you can make informed decisions about when to enter and exit trades. In this blog post, we’ll take a look at three of the most common S&P Emini futures price action patterns and how you can use them to your advantage.
The Three-Bar Reversal Pattern
Three-bar reversal pattern
The three-bar reversal pattern is a bullish signal that indicates a potential change in trend from bearish to bullish. It consists of three candles: a large bearish candle, followed by a smaller bullish candle, followed by another large bullish candle.
The key here is that the second candle must close above the midpoint of the first candle’s body. This pattern can be used as a standalone signal or in conjunction with other technical indicators to confirm a trade entry.
The Bullish Engulfing Pattern
The bullish engulfing pattern is another bullish signal that occurs when the body of the second candle completely engulfs the body of the first candle. Like the three-bar reversal pattern, this pattern can also be used as a standalone signal or in conjunction with other technical indicators.
The Bearish Engulfing Pattern
The bearish engulfing pattern is the opposite of the bullish engulfing pattern; it’s a bearish signal that occurs when the body of the second candle completely engulfs the body of the first candle. As with the other patterns, this one can also be used as a standalone signal or in conjunction with other technical indicators.
Conclusion:
S&P Emini futures are a popular choice for day traders due to their liquidity and tight spreads. To be successful in trading these futures, it’s important to be able to recognize common price action patterns. In this blog post, we’ve looked at three of the most common S&P Emini futures price action patterns and how you can use them to your advantage. Remember, these patterns can be used as standalone signals or in conjunction with other technical indicators to help you make informed trading decisions
Anyone who wants to learn how to day trade S&P emini futures needs to have as much information as possible in order to help determine where to place a trade. Trading is not easy to do because it is impossible to know the future with any degree of certainty. But the market does give off signals and a wise trader needs to know how to interpret the signals. Market prices seem to move erratically, but with enough information, trading S&P emini futures can be done with a greater assurance of success. An S&P emini futures trader who has Information about market signals and knows how to use them makes knowledgeable traders much more successful than others who use “seat of the pants” method.
Some of the information that S&P emini futures traders should have are:
- The Trend
- The Intraday and / or Low
- The Calculated Trading Zone via Taylor’s Book Method
- The daily calculated range
- Support and resistance levels
- Stochastics
- Candlestick patterns
These are some of the bits and pieces of information every trader needs to have in order to assess a trade. Of course, that is not to say that even with all this information a trade will work out, but having this knowledge puts the odds of success more on the trader’s side.
Having as much information as possible gives S&P emini day traders a big advantage over “seat of the pants” traders. It cannot be stressed enough that without learning as much as possible about the market, it is highly unlikely that a trader will succeed at making money by day trading S&P emini futures, much less in a trading career.
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