Many of you from the emini room know that I've recently been looking for some aspects within the Euro futures that I may take advantage of. You also know that I'm not a big fan of demo trading as it simply doesn't evoke the emotions needed for trading. So in my search for opportunity I found myself within the micro Euro futures or /m6e. As I work on a strategy for something like that Euro I want to both know that I was wrong or know that I was right, but I don't want it to hurt too bad. Thus the approach of trading these micro futures rather than trying out my implementation on the big contract.
Outside of what I do on a regular basis with trend lines and support and resistance I did notice myself approaching it in a different way than I had other instruments. First of all I was less involved with trend lines as you would classically call them. The diagonal trend line as it is best described. Rather I've been focusing more on horizontal support and resistance the past few months. Remember I'm referring to the overnight trade rather than the day trade. For me thats around 2:30AM CST - 5:30AM CST(not much sleep!). My hope is to develop a strategy that will be able to be placed before I got to bed with either a good start to the day ahead or a small blip in the radar.
As I said before I've seen that horizontal S/R has been giving me the best results, but my only issue is where price decides to go before it gets there. I know from past experience that the evens as we know them tend to act as nice support and resistance from time to time. With that we also know that trading the evens doesn't always mean a pivot at exactly 1.3100 for example. We can expect some sort of +/- within its stretch. One thing that I'm trying to workout out is understanding the reach a little bit better. How can I position myself to take into account a possible reach above that .0018 level or below that .0084 level. So if price heads above 1.3100 I don't always want to be involved depending on the approach. This makes it difficult to place a trade without knowing how it got there. As of now the only thing that I can think of is an automated programmed trade that cancels my orders if this happens or that happens and so forth. This to me is a little bit too complicated so at this point I'm mulling over a few other ideas that I will be updating you with soon.
At this point I leave you with that and hope to update you with a solid strategy for the Euro bigs soon.
FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.