Pivots, Patterns, and Intraday Swing Trades: Derivatives Analysis with the E-mini and Russell Futures Contracts, + Website

PREFACE

My initial efforts in trading were focused almost exclusively on what is known as position trading, using equities and the physical commodity futures. Stretched out over the days and weeks a position could last, a trend in that time frame would eventually begin to make sense in technical terms, unfolding gradually as it proceeded on. There was a pace to the decision process. As a trader, one could mull over the conflicting elements of the technical picture. Some aspects would recede into the background and render themselves less relevant; some would grow in their importance and become glaring.

Initial forays into day trading stock index futures reveal a starkly different decision environment. There is no time to dwell on technical conditions. A day trade opportunity does not take shape over days and weeks. Opposing technical signals don't recede in time enough to sweep away the cross current of doubts before a decision is required. By the time a trend finally makes sense, it is often about to end. Intraday volatility in the stock indices is far more exaggerated than the daily bar charts of other markets, partly due to the extreme leverage, partly due to the intense participation. And positioning techniques that survive in the action of the long-term trends in other instruments get slaughtered in the countertrend reactions of the highly leveraged S&P 500 futures contract within the short term.

When starting out, understanding the day as it unfolded on a day trading scale ...