Things to Monitor on Your Monitors.

[Nvesta81]

Hello, been awhile since I asked a question here, love this site!

I primarily trade futures indexes, ES and the Dow. My question, in order to better my trading in those contracts what other things should I be watching on the side? Let's say you only had 3 monitors to work with, what other charts would you be looking at? Would you watch individual stocks as well as the main indexes? Oil, gold? I'm sure some will say all of the above. However, I'm trying to narrow this down as much as possible. I want to know if any of you think some markets are clearly more important than others to monitor to improve your trading in any select one. I hope my question is clear. Thanks alot!

[Soultrader]

Hello Nvesta,

Personally I don't think you need anything else but the instruments you trade. The question is what is your setup/strategy based on? If it requires instruments like gold or oil to act accordingly in order for you to open a position on the index futures, then you will need it. If your setups are based on chart patterns, regardless of what stock ABC or oil is doing it will not matter.

For stock traders, watching the futures would be recommended. For futures trading... especially for intraday trading I have found the more junk of my monitors the more confusing. What setups are you playing? Breakouts? Retracements? Reversals? etc... Do you really need to watch gold or oil for these plays? (I am sure there are traders that have strategies based on other markets but I also think one can trade without them)

What works for me to understand the bigger picture is to analyze other markets like Asia and Europe. As US session starts after the two big economies end, you have an advantage in understanding the sentiment of traders worldwide. I have also started watching currencies, mainly the USD/JPY to trade the Nikkei. But these analysis only guide me on potential market direction and not entry or exit points. For example, lets say on Monday the Asian markets rallied followed by a decline in the US. However, USD/JPY stood strong despite the US markets, showing some signs of strength for the Asian markets on Tuesday. If the markets open with a smaller than anticipated gap down, I am immediately going to look for a long setup. Or if I missed the opening surge, I will wait for a retracement setup in the afternoon. So what am I looking? Technicals and fundamentals on a more global perspective... followed by familiarity with the instrument you trade and then having valid setups that you take systematically.

I dont recommend throwing a ton of stuff on your screens, mainly because I used to do just that which lead to paralysis at times. It only leads to frustration and the constant search for the "holy grail" by switching items on your screen every week. One week it was bonds, next week commodities, next week stocks, etc...

[DaKine]

Hey Nvesta,

I trade ES and the only things besides the ES charts that I have on my screens are the $TICK, $UVOL / $DVOL spread, Time and Sales, and Volume distribution. There is some good info here in the internals forum if your interested.

Irie!

[blib]

Nvesta,

I too trade mostly ES and find that there is a fine balance between having the necessary tools and cluttering your screen with things that don't add value. In addition to internals $TICK, up/dn volume, adv/dec, I also like to look at sectors (xlf, xle, xlp, xly, xli, xlv, xlu, xlk, & xlb) as these tend to give a broad idea where the leadership in the market is coming from. Similarly, looking at the VIX & bonds may also be helpful more as confirmation of moves than leading indicators. Lastly, oil is somewhat useful but only at extremes imo. The caveat to all this is that relationships are dynamic, sectors and "market tells" move in and out of favor and need to be re-evaluated on an ongoing basis for them to have value.