Momentum Indicator Question from YM Trader – 10 November 2009 (10:07)
Got a question from Marcus, an Emini Dow (YM) trader, about the Better Momentum indicator signals. I thought it might be useful to share the video response. The comments here are equally applicable to the Emini (ES).
Before entering a reversal trade (against the prevailing trend) be sure to check for exhaustion or blow-off buying/selling activity. Two patterns typically occur:
- First the exhaustion buying/selling activity followed by a series of bearish/bullish divergence patterns, or
- A series of bearish/bullish divergence patterns followed by a final burst of (exhaustion) buying/selling.
To take a trade in the direction of the trend, you don’t need the exhaustion buying/selling activity – just the Better Momentum divergence signal in the direction of the trend.
Towards the end of the video there are a couple comments about the current market and what I’m looking for over the next few days.
Good luck with your Emini trading.