Trading The Electronic Futures Market by Charles M. Steiner
Using this technique, you can visualize market direction
and identify supply and demand zones so you
can enter trades with a high probability of success.
Data available to futures traders for analysis is price, time, volume, and open interest. All analytic methods use this information to display price action and to create technical indicators derived from these four datasets:
■ Price is available as open, high, low, close for a
finite time period such a daily, weekly, monthly,
or segments of a trading day such as portions of an
hour or day.
■ Volume for any given period can be broken down
for any given time segment and displayed as an
indicator or used to construct volume-based bars.
■ Open interest is largely ignored in technical analysis
because the fluctuation of open interest is thought to play a minor role in trading decisions and rarely triggers a trade.
■ Time segments during a 24-hour electronic trading day are of interest because of spikes in volume related to news events, volume during the open outcry pit sessions, and volume from various parts of the world as trading progresses from East to West, continent to continent, as the 24-hour electronic trading day progresses.