How to Trade with the Opening 3 Minute Candle in ES Futures

Understanding the ES Futures

ES Futures, also known as E-mini S&P 500 Futures, are financial contracts that allow traders to invest in the S&P 500 stock index. The S&P 500 index is a market capitalization-weighted index of 500 of the largest publicly traded companies in the U.S.

The Globex and New York Openings

The ES futures market operates 24 hours a day, with trading occurring on the Globex electronic trading platform outside of regular trading hours and on the New York Stock Exchange during regular trading hours. These two trading sessions offer different market dynamics and can provide different information to the trader.

Developing Support and Resistance

Support and resistance levels are key concepts in technical analysis and are used by traders to identify potential entry and exit points. By observing the opening 3 minute candle of both the Globex and New York openings, traders can identify initial support and resistance levels and look for price action around these levels.

Looking for Divergences

A bullish divergence occurs when the price of the ES futures makes a lower low, but the indicator being used makes a higher low. Conversely, a bearish divergence occurs when the price of the ES futures makes a higher high, but the indicator being used makes a lower high. These divergences can provide signals for potential trades.

Taking the Trade

Once the price bounces off a support or resistance level and a bullish or bearish divergence is identified, traders can look to enter a trade. Traders can use stop-loss orders to manage risk and protect their capital.

In conclusion, by using the opening 3 minute candle in both the Globex and New York openings to develop support and resistance levels, traders can look for bullish or bearish divergences and take trades at key points. Happy trading! (or as we like to say in the trading world: “May the markets be ever in your favor!”)

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