Hi Guys, Is it possible to know when ES Futs could make a big move like maybe more than 50 - 60 points in a day or more than 100 points in a week perhaps ? The idea is to avoid making a trading around this. So if there is a way to know when ES could possibly make a big move (not 100% of the moves but at least 90%) - that is what I am looking for to not trade around. I guess as an example we could take fed rate announcements, other such announcements etc which would likely make the ES move big. The question is, is it possible to know 90% of occurrence of those moves ? Thank you
the broad market will tell you what you want to know. i would think you would want to just know the direction of the market coming out of compression to ride the big move rather than avoid it?
Related to what Mark said, prominent trader Linda Rashke tracked what she called NR7, or the narrowest daily range in 7 days as being potentially significant. Or to quote another trader, “Enter when it is quiet and exit when it is wild”.
Very hard to predict such days, because some just get triggered as a result of funds liquidations, a large hedge or just a "genius" clerk put 5,000 ES at the market. your goal should not be to predict such days rather have a plan when it happens, in other words, a plan when the market behaves outside of your comfort. That is when real discipline is tested where hope versus plan make a huge difference.
This is from theory, not practice, but I would watch implied volatility. Just like with stocks nearing earnings, IV should increase if "smart" money expect a large move. If IV is not reflecting it, then there was nothing known on the horizon. But if you are going to get out of the market every time someone sneezes, I don't think that would be beneficial in any way. I would be curious to know if anyone came across or did such study.
When ? - look at those who do Predicting / forcasting. There are some in this forum. - Go get an accurate crystal ball OK. Seriously there is no way. However, with experience & with 6th sense, you might be able to determine when big move is coming. Even if market is making a big move, it doesn't mean we can profit from it especially when market is moving in jerky chaotic erratic manner.
The closest predictor of a move on the S&P is the VIX, it might only give a few moments notice (sometimes milliseconds) but it faithfully spikes on violent down moves of the S&P (& vv)..If the question is to avoid trading during a move, then trade something like the cash DAX or CAC, there is a correlation between their move and the S&P move but since these don't trade 24 hours, you can calculate a probable opening price.