How To Use TM’s Indicators: The Futures Trend Matrix

Four tactics using the Futures Trend Matrix keep
you on the right side of trending futures markets.

Identifying and riding a strongly trending market can be one of the most
successful approaches to trading, but with markets trending only 30% of the
time, the trick becomes determining which market is in a trend, where to get in
and when to get out.

The Futures Trend Matrix is designed to help traders define what phase of a
trend–if any–a market is in and to provide a visual tool that assists you in
making trading decisions.

Generally, adentifying
when a trend has ended and trading in the opposite direction of the trend (i.e.,
selling into the end of an uptrend or buying at the conclusion of a downtrend).

While there are many approaches to defining and entering trending markets,
the following four strategies use the proprietary features of the Futures
Trend Matrix to help exploit one of these approaches.

The Futures Trend Matrix uses a proprietary formula to determine whether a
market is in a short-term, intermediate-term or long-term trend. Since markets
usually chop about in directionless trade, the first step is to identify a
strong trend. The Futures Trend Matrix helps traders quickly identify a strongly tending
Markets are generally making a trending-move if both the
intermediate-term and long-term arrows from the Matrix are pointing in
the same direction. When the intermediate- and long-term arrows are in
opposition to one another, the market is either not trending or has recently
changed the trend from up to down, or vice-a-versa.

The Futures Trend Matrix greatly simplifies the task of identifying markets
in trend moves. With a trending market identified, the next step is to find
entries with an eye to minimizing risk.

Matrix Impulse

The first approach gets you in on markets that are moving so strongly in the
direction of a trend that they overcome an initial, intraday impulse to pull back,
and then continue moving strongly in the direction of the trend. Here are the
steps for a down trending market (the steps are reversed for an uptrending

Identify a market that is in a potential runaway mode by locating a
contract on the Futures Trend Matrix that has all three matrix arrows —