High level of leverage is the most significant characteristic of futures trading. Detection of market trend is the key for developing winning trading models. Currently, we developed a proprietary model for trading US equity index futures including SP 500, Dow Jones 30 and NASDAQ 100. Our financial futures trading model uses a combination of the following market factors:

• Market Momentum Factor - Since more and more momentum players join to the market, this is an important factor to consider for short-term tradings. We calculate momentum factor based on the previous five days' closing price and intraday high and low prices. When percentage changes are within a specified range, we consider it will extend the current trend and will reverse after breaking the range.

• Market Strength Factor - The reaction to major news are quantified to estimate market mood. Adance/Decline ratio, 52-week high/low ratio and volume changes are also considered.

• Moving Average Crossing Factor - is traditionally considered as a significant signal for market trend. We use short-term, mid-term and long-term moving average for our model.

• Channel Breakout-Pullback Factor - Once a trading channel is broken, it tends to move in one-direction for a period of time. We use Fabinocci-type estimation to calculate breakout-pullback factor.

• Market Correlation Factor - Several market indices are considered for corrleation coefficient calculation: SP500 vs. (FT100, Nikkei 225) and SP500 vs. (Dow 30, NASDAQ 100, RUT 2000) are used to obtain factor number.

• Psychological Effect Factor - Due to the high level of leverage, higher level of stressness present in the futures trading compared to equity trading. Stop-out order is a common technique used to prevent disaster. But it is also common that market moves to the opposite direction once you stop out. This factor is trying to take these effect into consideration.

• Arbitrage Opportunity Factor - It is observed that futures value may significant differ from cash value after discounting in these situations: market open and close, big market movement and evening trading hours. We also take these arbitrage opportunities into consideration in our model.

• Relative Value Factor - The relative value between index annual yield and bond yield are considered. Few people will invest in stock market if bond yield is comparable to equity yield.

Check a demo of our trading model for SP-500 Index.