Day trading strategy using dollar index futures

We use a negative correlation with the US dollar index futures
market to make educated trading decisions that go along with our pre-determined
trading plan.  Simply put, we look for
trading opportunities within our simple trade plan and when the dollar
index correlation confirms it we take the trade with higher
confidence.  We don’t always use the dollar
index, there are specific times when we know we cannot use it with confidence,
but as long as we know what to look for, and the correct way to use this
correlation, the dollar index will help us hit our trading goals every day we
use it.

This morning we can see the dollar index trading sideways
just below the PHOD.  Please notice we
are still trading the 06-12 contract considering the volume has not transferred
over to the 09-12 contract like many other currencies have this week
already.  The dollar index is trading
like it needs some direction in the near future, just below the PHOD so we know
this level of 82.650 may try to stick a little and cause prices to move
sideways.

The 144-range chart on the dollar index 06-12 looks like we’re
at the upper 1/3 of the range trading sideways on top of the PHOD and the recent
trigger-zone support drawn from the A to D points on the chart posted.  We can see that any trigger-zone we slop
around will be a price magnet, so we need the dollar index to move higher or
lower out of the trigger-zone (green rectangle) before we get the best market
personality from the dollar index today.