Ditch, can you provide some insights on how I should use NQ to better trade ES? Should I remove NQ from my screens all together? Should I watch something else? Thanks, -Fast
IMO watching the instrument you trade is good enough. I recall situations where NQ would move 8 pts, while ES refused to move more than 3 ticks. I find that when watching both, the advantages outlevel the disadvantages, so just as well keep it simple.
I use SPOT Aluminum as a leading indicator. You can hedge yourself against your future can collections. While trading the ES I tend to drink a lot of canned soda!
Fast..... If you find it confusing...perhaps don't watch it! not trying to be flippant.....maybe ease into it....and relax and observe till something makes sense..... In terms of market cap...ES is HUGE compared to NQ.....and INDU is the serious money! (again simplification)...so obviously....one of those indexes is a little easier to manipulate.....OR may be more sensitive to the "turn" when it comes. (your mission is to determine when is when and which is which, and when is which and which is when!!!!!) today was textbook in my opinion....a couple of big NQ stocks down preopen...IBM...setting a "dissapointing stage" ...eg...a few less stocks holding up the cow.....they tried to hold up the futures....then they collapsed...... Again...I can't answer your question directly.....for me its a "touchy feely" kind of thing.......gauging the overall market.....the more observation (unstressed by large positions) you do on the market...the more these relationships will gel in your mind. You have to be constantly looking and evolving with the market....just don't get stale and hung up on one specific indicator.
However, I do not agree with that. Even though NQ, ES and YM may switch rolls during the day it is very beneficial to watch all three and get confirmation to some potential moves.
Here's todays charts to compare, perhaps some trading genius can tell how to figure which one will follow the other
Be careful hedging your ES against Soda cans. I just found out Coca Cola is using an Alloy on certain seltzer cans. You may need to be short 20% Nickel and 80% Aluminum vs ES. I find The Nickel spread against NQ works very well!
regarding Ditch's comment about just watching 1 indicator.....Ive seen traders who watch hundreds of quotes...and some that watch just what they are trading......whatever works I guess..........personally I need to know what the basic overal markets are doing and certain key components...... but fast....if you are getting confused....take NQ out of the equation......I know a great trader who just watches and trades the big S&P....just price...........he does very well indeed!