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Re: Anyone trade the index chart?
1.- index better than futures in some points
under my analysis the reason is simple. futures are open double the time than the index is open. sometiemes futures are open even 24h a day meanwhile the index only between 6 and 8 hours daily.
because of the two of them has to do the same trend at the end of the day, the index has less hours to do so so its moves are more direct, simple and comprehensive. so, you can follow it better and better recognise which trend we are in. however the futures have more hours to do the same moves so, their moves get in the way of more complex structures, formations or waves that can confuse you.
conclussion: to follow the index is a good point.
2.- futures follow the index
in my opinion the futures follow the index. you can see that when, for example, there is an open bullish gap in the index and this gap influences the index during the whole session. you can see how, after the index price has been going up during the session(and the future followed it), at some time the index price starts falling but, cant break the open gap from the morning. so the futures, at the same time, stop their falling too under any obvious chart reasons. you think, whats going on? there wasnt any support there! why the futures dont keep falling as my bearish signal indicated me? you go to the index chart and realise: oh shit! the index couldnt break the open morning gap and this became a support in both markets (the index and the futures). this happened to me several times till i discovered what was going on. since then, i always have the index chart present at the time im trading the futures
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