I understand how to use $PREM with stocks. Does anyone trading the eminis use $PREM for buy/sell with the futures? Savage
PREM is good for identifying the turns in relatively rangebound trading. However, in highly trending markets it can lead you to catching the old falling knife.
Identifying range bound vs trending markets is of course one of the big challenges in trading. People who automatically jump ahead of every turn get nailed by these amazingly directional moves that have such mild beginnings.