My VM is dead as well @JohnS the only chart I was able to get were my a bit messy ones on a small screen - ninja does not even start :/
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This is SIM trading here - took some SIM longs off already
To me it may have a shorter term pull back (test the range or get back to the range for a moment) and then hopes and dreams to go up higher - which may be a deeper pullback on a down move longer term. There are some news events today so it all can go bananas.
The 6E is the EUR/USD Future spot rate, so not sure I understand the question. The EUR/USD spot rate is an OTC market, the 6E is a future contract, quoted on the CME, with an official DOM & Tape. And yes you are right, the 6E follows the spot rate, altough it tends to have slightly higher bid/ask values, whcih narrows down and goes closer to the spot rate as we go towards the end of the contract life (and it eventually becomes the same values when it expires).
I would not worry about it 2 much, and would just see them as 2 different things, except the 6E has an official depth or market and recorded transactions, which means you have a unique and real point of reference, which you obviously do not have on the spot market, unless you happen to have the DOM of all FX brokers, which would somewhat be representative (especially if you had the main FX players' books, which you won't have).
Hope this answers your question.
The following user says Thank You to dom64 for this post:
Yes i get that but what or who is keeping 6e in line with spot euro/usd? Is a market maker sitting there buying or selling contracts to keep it in line with the spot market? Is the the cme just changing the price with out volume? Does this effect the depth of market and volume? It feels like there is more to this. If i come in with a huge order that wipes out mulitple levels of the dom who steps up and brings it back in line with spot eurousd? Is it spreaders, market makers or is it the cme?
Nobody does, it is in line with the spot, if the spot moves, it moves, one is an OTC instrument and the other one is a derivative instrument. Mostly the 6E is used as a hedging instrument for those who have positions on the spot. it is also use as a speculative instrument, but it is pegged to the spot values, so nobody has to fine tune it to stick to the spot, it just does.
If you think it is important to be able to observe the DOM, Limits/Market orders then you'd be better of trading the 6E. If you are a mutli-millions company who uses one of the top players in the FX space as a counterparty, then you might want to trade the spot and hedge your positions on the futures contract.
This is to answer your questions, but frankly it really does not matter. The 6E is correlated to the spot, you could trade the futures based on spot data is this is where you were coming from, but no need to torture yourself really, just trade one or the other or both if you want to Hedge your positions.
Thanks for your replys. I still have not seen anyone say what exactly is keeping the 6e and spot eurusd in line with eachother. Like you said when spot moves it moves, what exactly is making the 6e move with spot eurusd?
The following user says Thank You to aaaaaa225 for this post:
So what's the point of depth and order flow of 6E? If there is a larger buy order at some level on 6E and I hide my stops behind it then suddenly at some bank sell orders are executed pushing price way down what's the point of someone looking at the depth of 6E when it does not have banks orders (nobody has)?