Thursday, September 13, 2007

Discovering the Forex Futures


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The SnP eMini had real low volume today, but I tried to trade it anyways, and got real small profits, a lot of wasted effort, and ended up with a loss for the day.
In a low volume environment, pullbacks can look like reversals, only one or two big trades is needed to drop the bid/ask spread by a few ticks, and it becomes easier for the locals to gun for stops. Tomorrow, I am anticipating more low volume action, so I am leaning towards not trading the SnP500 eMini altogether.

In the meantime, I have discovered some interest in the currency Futures. In particular, I have noticed some interesting behaviour as illustrated by the chart below:

In the above chart, the Australian Dollar is in the upper left hand side, the Loonie is in the lower left hand side, the Euro is in the upper right hand side, and the Cable is in the lower right hand side.
The first interesting thing that I noticed is that the same general trend persists in all 4 currencies, and that is up. The second interesting thing that I noticed is that volume started to appear more or less around 11pm (PST) for all four markets. It does make me wonder whether it is the same participants that are trading all four currency markets, although the price action seems to suggest different market participants.

The currency futures are currently more interesting to watch and even trade than the SnP500 eMini. I will start researching some more into the currency futures markets, especially the 4 currencies in the above chart.

UPDATE: I traded the Euro for a 15tick profit. I will have to start thinking about creating a second trading journal to track my trades in the other futures markets.

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