Underlying strength, rate of change and price fluctuation can all be analyzed using technical indicators to identify potential trade signals in the 10-Year T-Note futures contract (ZN).
The following 3 technical indicators are just a few of the indicators that can be used when analyzing futures trading markets:
- Keltner Channel
- Fisher Transform
- Double Exponential Moving Average (DEMA)
The Keltner Channel indicator was designed to identify overbought and oversold market conditions by looking at the underlying strength of a trend. If price action closes above or below the upper or lower channel, a buy or sell signal could potentially be established.
The chart below of the 10-Year T-Note futures contract (ZN) during October 2016 – September of 2017 is an example of using the Keltner Channel day trading indicator to spot overbought and oversold market conditions:
The Fisher Transform indicator was created to spot price reversals by highlighting reflection points where rate of change is the greatest. If the indicator reads above or below zero, bearish (above) or bullish (below) reversals could potentially occur.
The chart below of the 10-Year T-Note futures contract (ZN) during January – September of 2017 is an example using the Fisher Transform indicator to spot price reversals:
Double Exponential Moving Average
Created to reduce reaction time over more basic moving averages (Simple Moving Average & Exponential Moving Average), the Double Exponential Moving Average (DEMA) reacts quicker to indicate potential market moves. If the 50-Day DEMA and 100-Day DEMA cross, bullish (50-Day above) or bearish (50-Day below) trends could be on the horizon.
The following chart featuring the 10-Year T-Note futures contract (ZN) from January – September of 2017 is an example of the 50-Day crosses above the 100-Day DEMA indicator ahead of a bullish market trend:
As always, remember past performance is not indicative of future results and you should always trade within your risk tolerance levels.
As an award-wining futures broker, NinjaTrader provides deep discount commissions and unmatched support. Download NinjaTrader free today and backtest trade ideas with over 100 free pre-built indicators!