When day trading SP and Nasdaq futures, do you rely on your moving averages more than your support & resistant areas?
During first hour of trading, support and resistance zones on SP and Nasdaq futures are most important things to watch. The moving averages have not yet had a chance to come into play.
After that, if a trend is developing I watch several key exponential and simple moving averages on 2 minute, 5 minute and 13 minute SP and Nasdaq futures charts.
These specific moving averages give reliable support and resistance for market as long as slope of moving averages are fairly steep, indicating a trend. When there is no trend, moving averages are flat and pretty much worthless.
When a trending market makes a countertrend move, and hits a key moving average on two or more different time frames at same time, probability of a good trade setup increases dramatically. If you get three hits at same time, itís even better. Sometimes youíll see one key moving average get hit on five minute SP chart at same time another moving average is hit on 13 minute Nasdaq chart. This also gives a good trade setup.