c03 JWBT016-Busby September 30, 2008 14:23 Printer: TBD
46 A FOUNDATION FOR SUCCESS
Key Numbers in the Equity Index Futures
I trade futures every day and I could not do so effectively without using
key numbers. The yearly, monthly, weekly, and daily opens are important,
and I use them to gain a sense of market sentiment and to identify points
of entry for trades and profit target areas. I also use key numbers to locate
ideal positions for protective stops or stop/loss orders.
When each day begins, I consider prices from the previous day. I want
to know yesterday’s high and low. I also need the Globex or after-hours
trading numbers. Again, I want to know the high and the low. I also con-
sider the 6:00AMcentral time Dax price to be an important pivot to gauge
the feelings of the indexes. By keeping a watchful eye on these prices I
am able to determine at a glance if the bulls or the bears are the most
powerful.Daily Key Numbers to Watch
Yesterday’s high
Yesterday’s low
Globex high
Globex low
12:30PME-mini price
6:00AMDax futures priceConnecting the Dots
I record these numbers for the S&P E-mini 500 futures, the Dow and Nas-
daq futures, and the Dax futures. When trading a stock or commodity, I
also record the essential highs and lows of the particular stock so that I
can gauge the market’s mood in relation to that stock. With the help of
key numbers, I am able to determine the market’s state of mind. The trend
comes into focus. By placing the current price into the picture I am often
able to get the right direction to win.“T” Square
One of the exercises that I use to teach beginning traders when to enter a
trade is the “T” Square. This is a simple problem-solving method that most