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Curious as to what moves the markets (futures, CFDs, FOREX)


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Curious as to what moves the markets (futures, CFDs, FOREX)

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  #1 (permalink)
Grand Rapids, MI
 
 
Posts: 2 since May 2019
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I hope I can explain it well, and if not, I do apologize for any confusion and will monitor to help clear up what is it that I'm curious about.

Please help me understand what moves the markets.

So, I understand how SPX (index) "moves", or NASDAQ. That is easy, as they have clearly defined weighting based on companies in them.

The confusion that I have comes next ... how CFDs move? Do they correlate to futures price for that CFD? How is it that CFDs for the same product show slightly different price? Lets take Oil for example. CFD price for Oil may differ from one broker to the next, front month futures will also be several points away from most CFDs.
Futures contract prices that are several quarters in front of the current one will be very different (and I understand why), but what moves those said contracts - Contracts from a year out or more, sometimes have 0 volume traded for the day, yet their price moves, why?

When one "studies" a monthly chart for futures, lets say Gold. One is faced with a dilemma of using an adjusted or unadjusted continuous contract. One shows true price for the given contract month (unadjusted), the other shows a smoothed out continuous trend (without gaps caused by rollover). Yet, when you look at CFDs for Gold, this problem does not exist and the levels and areas of interest are clear. Should one always look at CFDs for long term charts given the limitations of futures contracts?

FOREX is also interesting. FOREX seems to be the "true" cash market for any given pair, but futures contracts on said pairs, rarely seem to come exactly to the tick of any of the FOREX products and are certainly plagued by the same long-term chart inconsistencies mentioned above.

Lastly, if futures and CFDs are just derivatives and do not move the market for the underlying product, then what does move the "cash" market and where can one find charts for them (chart for indexes are easy, but how does one find cash chart for all commodities and currencies?).

Thanks in advance and sorry for the multitude of questions in one post.

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  #2 (permalink)
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Just the bit I know.
CFDs have slightly different prices for the same product across different brokers because they have no centralised exchange. The individual brokers set their own prices and create the market. They are all very similar because the broker's will have their computer's monitoring other companies prices to keep them about the same to avoid arbitrage opportunities, or any differences are actually arbitrage opportunities so that brings them in to line. But one way or another they are all close together.
The same goes for spot forex and futures forex. The EURUSD will be almost identical to the futures 6E contract because of arbitrage. (Fun fact The price movement in futures forex is in Ticks, but spot forex is in Pips. Don't know why).

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  #3 (permalink)
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kova View Post
Lastly, if futures and CFDs are just derivatives and do not move the market for the underlying product, then what does move the "cash" market and where can one find charts for them (chart for indexes are easy, but how does one find cash chart for all commodities and currencies?).

Markets are driven by supply & demand.

Historical charts:
> https://futures.tradingcharts.com/historical/GD/2011/0/continuous.html
> https://futures.tradingcharts.com/chart/GD/M

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