Trading Futures is a whole different ball game than it was just a few years ago! 

Now, you are taking unnecessary risks if you restrict your analysis to a single market's past price history, no matter how much strategy testing you do or how many single-market technical indicators you study. The best way to help identify trading opportunities in the markets on a consistent basis and to protect your capital is to incorporate intermarket analysis into your trading strategy.

John Murphy, in his book Intermarket Technical Analysis sums it up like this:  “To ignore these interrelationships is to cheat oneself of enormously valuable price information. What's worse, it leaves technical analysts in the position of not understanding the external technical forces that are moving the market they are trading. The days of following only one market are long gone. Technical analysts must understand the impact of trends in related markets all over the globe. Trying to trade the markets without intermarket awareness is very dangerous.”

Markets Are Not Isolated

Many traders have little awareness of market globalization and, therefore, rely upon trading strategies or approaches that do not take into account how other markets affect the market they are trading.  Simply following soybean prices because you're trading grains or watching Euro FX because you're a currency trader is not enough!  Having little or no regard for what is happening in seemingly unrelated markets is like driving down the street wearing a blindfold. Sure, you might make it to where you are going . . . this time. But the chances of getting into an accident are high.  Each time you drive with that blindfold on, you are exposing yourself to unnecessary risk.  Intermarket relationships exist and can either work for you if you are taking them into account or work against you if you ignore them.  It's your choice! 

Even those futures traders who do recognize that the global economy has dramatically altered the way in which the world’s financial markets interact often draw a blank when asked how they take these intermarket effects into consideration in their own trading. The focus of technical analysis has continued to be limited to each individual market – maybe because it’s just easier to do it that way. But the price paid for taking the easy way out can be enormous.

Let Me Give You A Real Life Example

	"It is a powerful indicator that evaluates the strength of a current price move and provides a signal when a trend may change, sometimes days before it becomes evident with moving averages" - Futures Magazine Education and Analysis for Financial and Commodity Traders

Let's say you are a grain trader.  You trade grains, you watch grains, you know everything there is to know about grains.  But what you may not know is how energies, meats, and currencies can affect the grains.  Doesn't it make sense that energy prices would affect the grains, most notably corn because a big share of the U.S. corn crop is used to produce ethanol to meet government mandates for cleaner fuel?  This factor alone has been enough to change the price outlook for corn and agriculture in general in the last few years and has put a different twist on the relationship of energy and grains.  

Grain producers also use fuel on their farms.  Fuel is used to transport their goods. Then the goods are bought and sold using different world currencies.  Because corn and many other commodities are priced in U.S. dollars, any change in value of the dollar can affect export sales. Prices for grain products used for feed play a big role in the production and supply of hogs, cattle and poultry, reaching the consumer at the meat counter.

These relationships are easy to visualize.  Most "intermarket" relationships are beneath the surface and not as obvious as the one in this example.

Leading Indicators vs. Lagging Indicators

Ask any trader what tools or types of analysis they are using and you're probably going to hear Stochastics, Fibonacci, Elliott Wave, MACD, moving averages, etc.  You have probably used or are using one or more of these indicators yourself.  All of these indicators and methods of analysis are trend following in nature, which means they lag the markets because they are based on past prices that have already occurred.  This lag is why many traders are unsuccessful.  A trend may begin on a Monday, but because you use lagging indicators you may not get the indication until Wednesday.  This lag ends up costing you money. 

If you are using the same trend-following indicators to exit your position, more often than not, you'll find that at one point you had a nice profit but by the time you actually got out of the position, most, if not all, of the profit was given back.  This is frustrating, isn't it?  You can't forecast trends if all you're using is trend-following indicators!  To be able to get on board a trend early, you must have something that can anticipate instead of react to trend changes.

If you are trading using lagging indicators that react to past prices, you are stacking the odds against yourself, causing you to miss out on good trading opportunities..  What you need is an indicator that can anticipate trend changes with a high degree of accuracy.  Having the right tool for the job is critical. 

Technical Analysis + Intermarket Analysis + Leading Indicators = VantagePoint Software

Many traders who come to us for help have been using traditional single-market charts to help them make trading decisions. The problem with using charts is that they only tell you what has happened. They do not tell you what is likely to happen.  It would be like driving your car and looking in your rear-view mirror and seeing everything you’ve already passed rather than being aware of what was ahead of you.  By the time you see a trend change on a chart, it's too late to take a position – you’ve missed the turning point!

Using neural network technology, technical analysis and intermarket analysis, VantagePoint finds hidden patterns and relationships between twenty-five related markets and a target market. VantagePoint collects and analyzes end-of-day data from one of the VantagePoint compatible data sources for approximately $25 - $30/month.  Because VantagePoint is an analytical trading tool and not a trading system, it can be used in many ways, based on the needs of the trader.  You can use VantagePoint as a standalone tool or as an intermarket filter to other indicators that you are already using.  Many VantagePoint customers have developed their own trading strategies based on the many predictive indicators VantagePoint offers.  These strategies vary from trader to trader based on their personal circumstances such as account size, risk propensity, experience in the markets, etc.

The real key to these indicators is that, by using intermarket data provided by neural network technology, they don't have the same lag typically associated with traditional technical indicators.

If VantagePoint does nothing more than keep you out of bad trades or if it gives you the confidence to take winning trades that you might not have taken otherwise, then it has done its job. You do not need to change your current trading style. VantagePoint can be used to augment your existing approach by giving you a broadened intermarket perspective. However you choose to utilize it, VantagePoint gives you highly accurate predictive information reflecting the intermarket dynamics that drive today's financial markets.

The Domino Effect

Think of it this way.  Line up 10 dominos in a row. What happens if you knock one of them down?  They all come crashing down. That is because they are all linked to each other. That same thing happens in the markets. Markets drive and affect each other, which is why you need to be aware of intermarket relationships rather than just focusing on a single market.

 With VantagePoint's daily forecasts at your fingertips, you'll reduce the risk and stack the odds in your favor on each trade you take because you are privy to predicted intermarket information that is simply not available to most traders. If you really want to be among the estimated 10% of traders who are able to become successful, then you owe it to yourself to start putting VantagePoint to work for you.

Here's What VantagePoint Tells You For The Next Day

First, it predicts the trend direction of the market.  This can be done by using any of the predictive indicators and then confirming the indication by using any of several predictive technical indicators.  Using the pattern recognition capabilities of neural networks, VantagePoint actually predicts the trends rather than following them.

In many cases, VantagePoint helps you “see” what is likely to happen in the market that you are trading before other traders (using only single-market analysis) catch wind of it. Frequently, the predictive VantagePoint indicators will flash an “early warning” – before it actually happens!  Because VantagePoint offers several predictive indicators, you can use any one of them or all of them in conjunction with each other to give you added confirmation.  As you become more comfortable with VantagePoint, your own trading strategy may evolve. 

Some VantagePoint customers even look at VantagePoint charts from related markets to add even more insight into what is likely to happen in the target market they are trading. For instance, the Dow chart and the Nasdaq chart often add insight into what's likely to happen in the S&P 500 market because you are able to look at forecasts spanning several related U.S. stock index markets.

The key to VantagePoint is its ability to analyze the target market by doing extensive technical analysis, then analyze relationships that exist between the markets and finally to use this analysis to forecast moving averages and other predictive indicators! Through extensive research, our research staff has been able to combine technical analysis, intermarket analysis, and neural networks and, as a result, transform moving averages and other indicators that typically “lag” into indicators that “lead”! This one aspect of VantagePoint makes previous research involving moving averages, and efforts by technical analysts over the past two decades to reduce their lag, outdated. Are you still using “lagging” indicators in your analysis? If so, just think what it would be like to turn them into “leading” indicators.

Not sure what markets to focus on?

With VantagePoint’s Scan for Opportunities feature, you can do just that – in a matter of minutes!  Scan for Opportunities is a powerful time-saving feature that rapidly identifies potential trading opportunities. It can be fully customized to suit any trading style.  You’ll get the benefits of VantagePoint’s intermarket analysis and predicted indicators without having to analyze dozens of charts one by one. Let VantagePoint do the work for you. Go here to see how.