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The reason Emini traders should learn to read a chart is because the current trend, or whether or not a current trend exists, can be determined this way. With some degree of probability, traders can also understand the movement of the price in whatever direction if they know how to read a chart. At first glance, charts of Eminis trading obviously tend to be confusing. However, they can become readable after a bit of practice and time. There are a variety of types of charts, from Bar charts to Candlestick charts, Hourly charts to Range charts, and even the more esoteric charts, such as the Heikin-Ashi chart. However, Emini traders should not let these choices overwhelm them. A basic Daily or Hourly Chart should be enough for an Emini trader to start with. How To Read An Emini Daily Or Hourly Chart? Price and Time are the two important pieces of information that are always available on both charts. In order to be able to read an Emini Chart, the first thing that a trader needs to do is to understand where the price is in the present moment, relative to where the price has been. Each candlestick on the Daily Chart is a representation of 1 day. Each candlestick on the Hourly Chart is a representation of 1 hour of time. In regards to the unit of time that is being observed, there are usually 4 important pieces of price information that can be clearly seen on both charts – Close, High, Low, Open. Unique characteristics are exhibited by every chart style and time frame, and traders can only learn them over a period of time. Before indicators are layered onto the charts, first price should simply be observed as it unfolds in real time. Since the markets happen to be fractal in nature, much smaller time frames can be observed down to 1 minute. In the beginning, Emini traders are recommended not to go too low, rather as low as a 5 minute chart is recommended. Initially, the chart may appear to be random chaos, but if traders are patient enough and give the chart enough screen time, they will begin to understand and able to read the chart just like learning to speak a new language. Tick Charts – An Alternative to Daily & Hourly Charts In tick charts, a certain number of trades are displayed before a new candle is printed. Unlike daily or hourly charts, or even range or volume charts, the number of trades serves as the foundation of a tick chart. A single trade counts as 1 Tick, whether it is for one or a 100 contracts. Usually, day traders have a preference for using tick charts. Apart from the detailed information that is provided by a tick chart, a very high ratio of signal to noise is also generated by it. Thus, if larger sized Tick Charts are used, much of the noise can be filtered out while still remaining apprised of trading activity rather than volume. This is what makes them a decent alternative to daily and hourly charts Nonetheless, every chart of Eminis contracts has a story to tell, regardless of what type of chart it is. So it is worthwhile for an Emini trader to learn to read as many types of charts as possible. Author of this article enjoys listening to the CFRN Emini Futures Live Market Commentary each day and also watching the CFRN Professional Emini Traders place live trades in their Live Emini Trading Room.
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