Trading retracements on futures is easier when using the TradersHelpDesk ADX strategy to identify when the retracement is likely to begin.

Trading Retracements on Futures – Entry Criteria

For trading retracements on futures, there is very specific entry criteria that must be met.  The entry criteris is:

  • Using one higher timeframe, there must be an ADX magenta peak indicating the retracement.  On the chart below, the top chart is the higher timeframe.  The pink (magenta) dot indicates the magenta peak has formed and a retracement to the average true range stop (ATR and indicated by the plus sign on the chart) should occur.
  • Go down to the lower timeframe, the average true range stop must be the opposite color of the higher timeframe.  In this case if the ATR on the higher timeframe is red, then the lower timeframe ATR must be blue.  Price must then test the new ATR stop (blue in this case) to ensure that an area of support has formed.  Once this criteria is met, then an entry can be made.

The ADX strategy triggered an ADX magenta peak trade on the 45 minute chart which perfectly aligned with the 3 minute ATR flip from red to blue and a retest of the blue ATR.  Profit targets were filled on both.  When the next 3 minute ATR trade came in, we knew to ignore it because the retracement was fulfilled and you would be stopped out.  What happened?  The strategy was stopped out — no big surprise to us.

Trading Retracements on Futures

Of course there were also beautiful trades Crude and Gold, which we entered on both the Binaries Options and Futures.  Both made money.  The other trade we took was on the USDJPY which lost $12.