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What it Means for Futures to be at All-Time Highs

Posted by TopstepTrader on September 14, 2017

Equity futures are at or near all-time highs. What does this mean for traders? We asked our resident traders what it meant for a contract to make an all-time high or low. Here's what they said. 

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On Monday and Tuesday, the Emini S&P 500 ($ESZ7) and Nasdaq ($NQZ7) made new all-time highs, while the Russell ($RTYZ7) is not far from its all-time high either. Senior Performance Coach John Hoagland said that when a new high happened, everyone on the floor of the exchange would cheer. "It was almost like a collective milestone that we all achieved. That would last for a minute and then it was back to every man for himself," Hoag said. 

That's nice - but what does that mean for my trading? Here are three takeaways:

  1. New highs are uncharted territory. They provide new opportunities, but also new risk. Try not to form a strong bias on whether the market will continue or reject a new high. Take what opportunities the market gives you instead.

  2. It all depends on your timeframe. At TopstepTrader, we are all day traders. But if you are usually in and out of a trade in minutes, you may be more likely to fade a new high rather than buy it. If you are in a trade for hours, you could risk buying near that level if you're confident the daily trend will continue. 

  3. Everyone is watching those levels. It's not even just traders watching. News - whether CNBC, CNN or Fox News - coverage around the milestone will ensure that retail traders and everyone with a 401(k) is paying attention. You have to be in tune with the market even more than ever to sort through all that noise. 

So as these markets push up towards levels they've never been before, keep these in mind. Trade well everyone. 

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Topics: Performance Coaching, Trading Basics