Charting the Futures markets is probably one of the most ambiguous parts of trading. Unlike charting the Equities and Spot Forex markets, Futures traders are faced with multiple styles of charts:
Contract Specific Charts
Adjusted (Backward & Forward) Continuous Charts
Un-Adjusted Continuous Charts
Seasonal Contract Specific Continuous Charts
All Session Intra-Day Charts
Day Session Intra-Day Charts
If the Futures industry could use standardization in any one area it would be charting. As difficult as it was many years ago using paper charts of just the entire days bar chart range it sure was nice knowing that we were all looking at the same charts. In my opinion it made it more fair. Today with all the technology we have to create charts, who knows what the majority of traders are looking at. Of course with the computers trading with each other today on the electronic platforms, I sometimes wonder if they even look at a chart.
As traders all we can do is strive for consistency. That means picking a charting style that makes you comfortable in making trading decisions and sticking to that style of charting. If you find yourself using many different styles of charts you might run into a situation where you are not consistently trading well or finding yourself paralyzed in making a decision because the charts don’t agree.
I would like to discuss with you the idea of using intra-day time periods that give you equal time periods for each market you trade.
To start with let’s review something called Regular Trading Hours (RTH). Most Futures contracts now trade for almost 24 hours per day. However this does not mean that the contract is as liquid (good trading volume) during the entire 24 hour period. The most liquid time of the trading day is referred to as RTH. Normally this time period is the same as when the trading pit… Continue Reading
