To trade effectively in the Futures segment one may trade on the basis of Stock Future Tips from expert analysts. In this article we are going to discuss about the three common forms in which the trading in the futures contract can be done.
The first and most common form for trading in the futures market is Intraday Trading. In the intraday trading the futures lots are bought and sold in the same day. The intraday trading is considered to be very risky and at the same time most beneficial.
There are many common strategies which can be applied in the futures intraday trading. One such strategy involves the use of Bollinger bands to trade in the futures market. The “Bollinger bands” is an indicator, which is used to determine the current direction of the trend. If the direction of the Bollinger band is up one can assume that an uptrend is in place. Similarly if the direction of the Bollinger band is down, a down trend is in place.
There is also a middle Bollinger band line in this indicator. There are two bands formed by this middle line. These two bands are upper Bollinger bands and lower Bollinger bands. When the price follows the upper Bollinger band, one can expect the price to be in an uptrend. Similarly when the price follows the lower band, one can expect the price to be in a down trend.
This Bollinger band strategy is based on the price action. There are other Bollinger bands strategies as well. When the Bollinger bands are used along with other indicators like RSI, they can be used as a very effective tool for predicting the price reversal. When the price is touching the lower Bollinger band and is turning upward, this is a signal from Bollinger band that an uptrend will be followed.
Similarly when the RSI is in oversold region and is moving up, one can assume that a trend reversal and hence uptrend will follow. This is a trend reversal signal from the RSI indicator alone. When the RSI and Bollinger Bands both provide a signal for trend reversal, it can be considered as a strong signal. One can rely on the confirmatory signal and can open a buy position in this case.
Thus, we have seen effective Bollinger Bands strategies, which can be used to trade effectively in the Futures market. The technical analysts in the expert advisory firms like TradeNexa also generate Stock Future Tips, based on this analysis.