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, it’s even better. Sometimes you’ll 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.