for Nasdaq 100
By Ralph Russell
The methods used in daytrading the Nasdaq 100 futures index (ND
and NQ) are similar to some of the methods used for the Real Time
Signals of the S&P 500. See the Real-time
Signal's Demo for an example of how the signals work.
Access to electronic trading is recommended. The experience of
the trader providing the signals is that market fills can be accomplished
in as little as one second through some brokers. This means you hit
the "Buy @ Market" or "Sell @ Market" button with
your mouse, and in as little as one to five seconds you will know your
fill, providing no Internet failure at that time.
We use Exponential Moving Averages as does the S&P 500 Real-time
Signal service. We are also using a 34-period Slow Stochastic set
to 34, 7, and 4 periods.
We use a smoothed version of CCI that has 34 periods of CCI smoothed
with a 10-period Exponential Average.
When we have a trend as determined by the various Exponential
Averages, we ignore indications from the Oscillators, as
they can be very misleading in a trend.
We rely on the significant mathematical levels the market achieves
in relationship to the most immediate movement, in relationship to the
day's total movement and in relationship to the two-day total movement
in many cases.
We use Math of the Markets
a spreadsheet, developed by myself (Ralph Russell) to calculate the
various levels. This normally keeps a person extremely busy during the
day, as no movement is insignificant. Movement tells us of the possibility
of upcoming curves in the road, much as road signs warn us of railroad
tracks, hidden stop signs, curves, ice on bridges, and other such changes
in condition as one might experience driving.
The 1-Min chart is a lot like a road map. If you remove the time
legend from a 1-Min, chart it would be difficult to tell what time frame
it is. If you remove the price scale from the chart, you will have trouble
showing me the difference between a
1- Min chart and a daily chart. It just takes place faster.
I once had a beginning trader tell me I had just shown him 405 days (almost
two years) in one day! There are 405 minutes in one day of 1-Min price
bars on an index futures chart for the day only session. From his stock
trading experience he immediately grasped the concepts I was trying to
relate to him.
You could compare this chart to the instrument panel in a sophisticated
aircraft used in instrument flying. Although the pilot cannot see
the ground, or anything else around him, he knows from the attitude instruments
and navigation tools, what the position of his aircraft is relative to
being sideways or upside down, he knows how fast he is traveling, and
where he is. He is always measuring and considering distance from
various navigation aids and destinations. He is computing fuel consumption
and time remaining until fuel is exhausted.
Any time frame chart tells us a lot about the market and what
it is doing, and we soon learn to read if what we presently see is going
to continue or change. It is these change announcements that clue us
into the beginning of a new direction or trend.
We reference a 5-Min chart of the same market along with the
1-Min chart. We also reference, at the beginning of each day, the
daily and weekly charts of the futures and the cash indexes appropriate
to the market we are trading.
There are no magic indicators, no magic tricks or tools; there
is nothing secret that has not been written about in many of the books
written about trading and how to trade.
We do admit to using Elliott Wave Theory.
This subject can and has filled books and I do not intend to get into
any discussion of it here. I can only say that there are definitely waves
of emotion in the index futures markets intra day and interday. It is
from these waves we try to capture profits.
Normally the beginning and ending of these waves is mathematically
determinable to some degree of approximation before they end and a
new one begins. This is the "artsy" part of day trading in this writer's
opinion. Only experience over hundred's of trades and years of reading
everything published, if possible, learning from trading, and learning
from talking with other traders, will help solve the puzzle of
how and in what way one might make consistent profits in any of these
It is our desire that by following along with our teaching indications
you are able to help, or improve, even develop your own successful
trading techniques as we broadcast live orders during the trading
day in the ND and/or the NQ markets, as well as the S&P 500.