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Futures Technical Analysis Tools

Sun Dec 20 2020 07:06
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Futures trading can be more beneficial with the use of technical analysis tools. But which tool do you have to use for technical analysis? Many questions arise in a trader’s mind about using these tools. Here we are with the best technical analysis tools for futures trading.  

All top fund managers, hedge fund firms, and investment companies use these tools. These technical trading tools are also used in some popular expert advisors. These tools help in making automated trading easier.  

Not only the futures market, but decentralized markets use these tools. Markets like forex and crypto exchange and some others have seen a huge impact of these tools on trades. If we start finding technical analysis tools for the whole trading world, then there are many.  

Top Futures Technical Analysis Tools 

These tools can be into various categories as per the instrument traded or trading platforms. Technical analysis tools are the same for each financial market.  

But it can differ when we categorize it according to the trading asset. Like commodities, futures and options, equities, and assets with liquidity such as forex. Various markets also make changes to the tools that we need to choose.  

For example, there will be some tools useful only for futures options or futures markets. So here below tools, you can use for commodity futures trading. Along with it, for stock index futures, currency futures to make a profitable business. 

#1. Alpha-Beta Trend Channel 

On any trading platform, you will find that market trends are very important. The same thing happens with a future contract. No matter if you are trading commodities in the future market or you are trading options on futures. 

The Alpha-Beta trend channel is one of the top technical analysis tools. In this method, two lines are created at the up and down of the moving average. This channel of price field is used for market forecast. 

#2. Average True Range 

Working with an average true range is also considered to be the major tool. It's perfect among the best futures market technical analysis tools. These three basic rules are used to make decisions in the futures market.  

These three rules are a comparison of two values. They are closing and opening the values of today with the opening and closing values of yesterday for a trading asset.  

Getting values from different timeframes and applying them as final indicators. This is the thumb rule for this technical analysis tool. 

#3. Commodity Channel Index 

The commodity channel index uses a trading strategy that is good for commodity contracts. That is why technical analysis tools such as commodity channel indexes are used for commodity contracts only.  

But, many traders are there who use this indexing system for analysis. They perform analysis of stocks and other derivative products. This trading system on the timing of the market.  

#4. Oscillation 

Various oscillation technical analysis tools are used in the futures trading market. One of them is the Chaikin oscillator. This one is used by subtraction of various Accumulation/Distribution lines. The first EMA used is 10 days and the next is a 3 day EMA.  

#5. Bollinger Bands 

Not only in the commodity exchange or stock indices market, but this one is also used in stock futures, gold futures, and many other futures prices. 

A trading band is developed around the simple moving average also known as SMA. Various trading tactics are then used to find out the width of the trading band.  

#6. Demand Aggregate 

Aggregation of various investment instruments and market data is general in technical analysis. Demand aggregate is one of the most important tools. It's used for technical analysis in the futures market.  

In this tool, the main components that we will have are open interest, mercantile exchange, price trends, more. All these factors from market trends and market data are used to find the market sentiment.  

Both of the market sentiments such as bullish or bearish can be found with this tool. The trading volume about trading instruments is also very important in it.  

#7. Elliot Wave 

This one is at the top of the list of most popular technical analysis tools. This is because not only the Elliot wave is used for futures trading. But many other financial-markets also use this method.  

If you are interested in having a tool that prefers modern and advanced trading methods rather than traditional trading methods. Then this one is a perfect trading tool for you.  

The best part is that you will get an overview of the global economic market in which you are trading. You are not limited to current market trends or chart patterns.  

#8. Demand Index 

The comparison and analysis of price and volume of trading are known as demand index technical analysis. It is all around the price actions and volume of trade. It is known as one of the major price indicators in the futures market.  

It is one of the simplest among all the other technical analysis tools. If you are interested in price forecasts of an asset before you start investing, then it means that the demand index is the perfect option for you.  

#9. Arms Ease of Movement 

This type of analysis is based upon the ease of movement that can occur in the market for a particular investment instrument. Arms' ease of movement is popular among traders who have heard about the Mr. Arms' Equivolume charting tool.

Both technical analysis tools and charting patterns are developed by Richard W. Arms, Jr.  The Arms' ease of movement is used to knowing the chances of ease of movement in the trading market. This tool is the expansion of the before developed tool by Mr. Arms.

#10. Commodity Selection Index 

This analysis is important for a futures contract trader. Due to high volatility in the market, the technical analysis tools for futures become very easy. Using this tool futures traders will trade futures with many trading perspectives.  

From rating assets for long term to short term trading, this method is widely used for market analysis. From a trader to a speculator, it is very important to use this for price forecasts and buy or sell decisions.  

Conclusion - Technical analysis tools

If you want to make money beyond limits in futures trading. And in markets such as commodity trading, crude oil futures trading. Then it is important to have the best technical analysis tools for your trading strategies in global markets for futures.  

Saving more on commodity futures trading commission or brokerage is not a useful idea. It's not fruitful in this volatile electronic trading world. Various trading systems developed these days to use futures trading analysis tools.  

But it all depends upon you what kind of trading strategy and trading plan you have for your trading account. You must have specific ideas and visions for your trading. Never try to copy other’s trading styles or techniques. You must have to analyze things for your trading behavior. And then choose the right tools according to your needs.  
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