Just an update on this. I made a neat profit on the Soybean-Corn spread so I could end of the month on a positive and also pushed the year to date into profit.
Currently in on Lean Hogs Jun-Feb16 spread.
Synthetic is when you construct the spread your self by simply long one leg, short one leg of a spread, could be calendar intra-market or inter-market. For example, many of the crack spreads are exchange traded now, where as if i wanted to construct a spread from the NK and the ES, i would have to do this by legging into them manually.
The following user says Thank You to xiaosi for this post:
This is just an idea and a question. The MACD indicator calculates the difference between typically the 12 EMA and the
24 EMA and then uses a 9 EMA to smooth the difference. (Hope I have this correct.) Is it possible to modify the
MACD to subtract say a (Jan CL 5 unit futures moving average) from a (Mar CL 5 unit futures moving average) (Mar CL 5 unit futures moving average - Jan CL 5 unit futures moving average ) and use a smoothing moving average (probably small) to produce an indicator? (The number 5 is only used as an example.) So instead of the MACD charting a single index or other, it would chart the spread differential (using 2 futures moving averages )? This might produce a better spread chart?