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What indexes do you watch for trading Naz stocks?
- Thread starter dumtom
- Start date
I look at the QQQ's, SMH's and Nas Futures.
In ESignal, use: NQ #F
I'm interested to hear how others use these indices for speculating on price movement.
I use open, high, low, and close of the current and previous day to determine support and resistance levels. More often than not, at my experience level I find these areas to be indicators of when to be cautious of entering a trade, as I'm not adept at reading what may happen when a price hits those points. With skill, i'm sure these points constitute a nice edge.
One way I like to trade is to watch how much a stock moves with an index. Sometimes when the index moves sharply in a direction, a stock will also move, but perhaps without as much momentum. When the index heads the other way the stock price moves drastically. (I guess this is the definition of strong & weak stocks vs an index.) Then it's a matter of watching for the index to move in the direction of the strength or weakness of your stock and enter the trade. If you're wrong, you're limited (somewhat) in the direction the stock can go against you, but can make large gains when it goes your way. This is a clumsy description of what is probably a common trading technique, so hopefully someone can elaborate further on the particulars. ( I use 1 minute bars, but I don't know if it is optimal. Perhaps tick charts would be better?)
Only recently have I started using trend lines on index charts and watching price action around those lines. I always find it fascinating when I draw a trendline between two points and watch prices bounce merrily along that line, or break through and reverse the trend. It's a foggy crystal ball, but i'm getting better! (To see really great charts illustrating trend line usage, read Margo_Trader's journal.)
I'm interested to hear how others use these indices for speculating on price movement.
I use open, high, low, and close of the current and previous day to determine support and resistance levels. More often than not, at my experience level I find these areas to be indicators of when to be cautious of entering a trade, as I'm not adept at reading what may happen when a price hits those points. With skill, i'm sure these points constitute a nice edge.
One way I like to trade is to watch how much a stock moves with an index. Sometimes when the index moves sharply in a direction, a stock will also move, but perhaps without as much momentum. When the index heads the other way the stock price moves drastically. (I guess this is the definition of strong & weak stocks vs an index.) Then it's a matter of watching for the index to move in the direction of the strength or weakness of your stock and enter the trade. If you're wrong, you're limited (somewhat) in the direction the stock can go against you, but can make large gains when it goes your way. This is a clumsy description of what is probably a common trading technique, so hopefully someone can elaborate further on the particulars. ( I use 1 minute bars, but I don't know if it is optimal. Perhaps tick charts would be better?)
Only recently have I started using trend lines on index charts and watching price action around those lines. I always find it fascinating when I draw a trendline between two points and watch prices bounce merrily along that line, or break through and reverse the trend. It's a foggy crystal ball, but i'm getting better! (To see really great charts illustrating trend line usage, read Margo_Trader's journal.)
Originally posted by arzoo
I'm not too versed in futures, so just wanted to ask how much of a leading indicator does the nas futures show for the nas' actual movement?
and how good of a correlation?
thanks.
During most of the day on Tueday, Intel's (INTC) chart was identical in its move to the futures.
I wouldn't use them as the only guide, but I almost never go against the futures.
They help by telling when to get out and when to not get in.