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Trade Bullish Breakout Signals with Technical Indicators

Through the use of technical indicators, there are a number of futures market trading strategies you can implement to potentially benefit from bullish signals. For many traders, recognizing chart patterns is often the first step to building a futures trading strategy. This is followed by identifying buy and sell signals to help guide the execution of that strategy.

Bullish Pennant Pattern Setup & Signals

For example, a trader identifying the following futures trading pattern and signal combination could potentially be targeting a bullish breakout:

The chart below of the Dow Industrial Average futures contract (YM) illustrates these trading signals:

Reviewing this chart, one strategy based on recognizing this combination could be to buy a futures contract once the pennant pattern breaks its downward trend and price action breaches the 50 Day SMA.

Bullish Flag Pattern Setup & Signals

Another example of a futures trading pattern and signal combination that could potentially be considered as a signal for bullish breakouts is:

  • Flag Pattern
  • Bullish Breakout
  • Price Action back above the 50 Day SMA

The chart below of the Dow Industrial Average futures contract (YM) provides a look at a flag pattern signal that led to a bullish breakout above the 50 SMA:

When recognizing the pattern & setup above, one potential approach could be to use it as a signal to buy a futures contract once price action breaks through the 50 SMA threshold. Though going against the grain when trading futures can be intimidating, if you have a sound futures trading strategy behind the trade, it will be easier to remove emotion from your trading decision.

As always, remember past performance is not indicative of future results and you should always trade within your risk tolerance levels.

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