Trading Nasdaq futures using ATR and Stochastics provided a beautiful short entry on the 60 minute time frame today. Traders had multiple options for shorting it including the Nasdaq futures contract, Nasdaq micro, touch brackets and binaries, depending on their risk tolerance.
Trading Nasdaq Futures Using ATR and Stochastics
On the hourly chart, price retraced back to the ATR after a magenta peak. Price then formed a bearish hidden divergence by 10am New York time. In this example, although a futures traders would need to run a larger stop (it is an hourly chart), if price flipped the ATR on the 6 hour chart and went directly to the CD, then there was a 80.75 points as profit potential. Of course, the daily bias was to the short side this morning at 6am New York time.
A trader could also have chosen to trade the new NQ micro contracts or the Nadex Touch Bracket (7601 – 7751). The NQ micro contract is valued at .25 per tick while the touch brackets are valued at $1 per tick.
The Live Market Analysis and Coaching Sessions show you how to enter these trades Tuesday, Wednesday and Thursday mornings at 6am (each session is recorded and available for playback).