Market Timing  |  JUN 1998

Trading Monthly Eurodollars by Scott W. Barrie

Trading Monthly Eurodollars by Scott W. Barrie Traders tend to be more interested in trading short time frames than long ones, but a longer one can be of value as well. Here's a simple technical system based on monthly Eurodollar charts for entry and exit signals. A tool often overlooked in trading futures is the monthly chart. Monthly charts present a clear picture of the trend, be it up, down or sideways. The price trend shown on monthly charts are the moves that as traders, we all wish we could participate in. However, most traders lack the patience and discipline necessary to stay with a long-term position. The true beauty of the monthly chart lies in that it allows the trader to see the forest through the trees. The day-to-day noise of the markets is filtered by the monthly high-low-close bars, and patterns are more easily discernible than they are in other, shorter-term, charts. But this picture is a relative one, as the distance between support and resistance levels is too wide in most monthly charts; too much risk could be involved. So for many, the monthly chart is considered an interesting anomaly but without practical use in trading. The monthly chart can be useful in trading, however, with the proper choice of markets and a solid trading plan.

by Scott W. Barrie