Futures on American indices and exchange rates. US stock indices

US financial markets continued to fall on Thursday due to expectations of tightening monetary policy. Dow Jones fell by 4.2% to 23,860.46. S&P 500 fell 3.8% to 2,798.03, led by financial and technology stocks. The S&P 500 and Dow Jones are correcting. The Nasdaq fell 3.9% to 7,296.05. The dollar's weakening resumed: the ICE Dollar Index, which measures the exchange rate of the American currency against a basket of six major currencies, fell by 0.01% to 90.274. Index futures indicate markets will open higher today.

Markets remain volatile following a strong labor market report in January, which could accelerate the Fed's pace of interest rate hikes. Comments from Fed officials indicated that central bankers do not see market volatility as a reason to change their current stance of gradually raising rates. New York Fed President William Dudley said three rate hikes in 2018 still seemed reasonable. Kansas City Fed President Esther George said three rate hikes this year are a "reasonable outcome." Minneapolis Fed President Neel Kashkari said the Fed is "far away" from higher rates due to rising inflation amid rising labor costs. Political uncertainty due to the failure of the budget deal also did not support investor confidence. The federal government has partially closed twice this year. The US Senate approved the budget deal today, but it is too late to prevent a government shutdown.

European indices are falling

European stock indices resumed their decline on Thursday following Wall Street's decline. Weakening Euro continued and British pound rose against the dollar after the Bank of England hinted that interest rates could rise as early as May. The Stoxx Europe 600 index fell 1.6%. Germany's DAX 30 fell 2.6% to 12,260.29. French CAC 40 fell by 2%, and the British FTSE 100 lost 1.5% to 7170.69. Today the indices opened with mixed data.

Chinese stocks led Asian markets' decline

Today Asian stock indices everything is in the red as the sale has resumed. Nikkei fell 2.3% to 21,382.62, despite the yen weakening against the dollar. Chinese stocks fell sharply as Chinese consumer inflation slowed to a seven-month low in January: index Shanghai Composite fell by 4.05%, and the Hong Kong Hang Seng- by 3.3%. The Australian All Ordinaries index fell 0.9% as the Australian dollar rose against the US dollar.

Brent oil futures are declining today due to concerns about rising global supply. Prices fell yesterday as OPEC member Iran announced plans to increase production by at least 700,000 barrels per day over the next four years. April Brent crude futures fell 1.1% to $64.81 a barrel on Thursday.

Share, etc.) without a significant loss in value.
Imbalance- a situation in which the crowd’s opinion regarding the direction of future price movement becomes one-sided and the crowd seeks to realize its opinion (OPENS POSITIONS).
- these are crowd positions (weak money), opened due to the liquidity of the Market Maker (strong money). Simply put, these are those positions of weak players in which the counterparty is the ONLY strong player (MM).
Alive- a market model in which there is no market maker and the price movement is caused by the advantage of one of the parties (buyers or sellers). The movement of the live market, in my opinion, is chaotic, i.e. not predictable.
Market Maker Market- a market model in which a large player provides liquidity to the crowd at the time of a strong imbalance. The market maker market, in my opinion, is natural and predictable.
It seems to me that: ANY LIQUID FUTURES CONTRACT (including to American indices) COMBINES THE LIVE MARKET AND MARKET MAKER MARKET MODELS. It all depends on the phase the market is in and how turbulent it is.

In Fig. 1. shows the state of market balance. In a calm market, MM places two orders (long and short) with a certain spread. There is also liquidity within this spread. This liquidity is provided by the crowd. The price can move up and down within the spread (spread between MM orders) if a slight imbalance occurs.

A minor imbalance is an imbalance in which the liquidity of one of the sides of the CROWD (for example, buyers from among the crowd) is sufficient to satisfy the desire of the other side of the CROWD (for example, sellers) IN THE MARKET. Thus, the balance point (the current price value) moves within the spread of the market maker, who does not have an open position. Moreover, the MM can rearrange its orders in the order book (an order for long and for short) as the price moves and not open positions. This is the phase of a LIVE MARKET, the movement is chaotic, as a rule, there is a sluggish sideways trend. As long as the value of the imbalance is within the limits in which liquidity is provided by the crowd, the market will be unpredictable and boring. Any transactions (intraday) on such a market, in my opinion, have a 50/50 chance of success.
If for some reason (news, graphic patterns, whatever) the imbalance grows to levels at which one side of the crowd is unable to provide liquidity, then the market maker comes into play. In the moment, if you look at the order book, it will look like a removal of liquidity from one of the parties inside the spread and impacts on the market maker’s large orders.

The chart shows how smooth price movements are replaced by a dense “sausage”, growing, but the market is not going anywhere. The crowd's opinion becomes one-sided, as a result of which the crowd aggressively seeks to open positions (in this example, short). Most often this happens at the moment and after the breakdown of a significant price level.


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CROWD OPINION: “Time matters here, and you need to open a position right at this moment, because “now everything is as it is!” Hence the density of everything that happens on the graph.
When the crowd's desire to sell is satisfied, the market comes to a new state of balance. All sellers have gained short positions and then sit and wait to see what will happen.


The market maker can only stretch his spread upward (push the top short order higher) and wait for the scalpers who opened short to close first, then other weak holders with a longer stop value. And closing short positions will naturally be a purchase, but there is practically no liquidity for shorts, it is already in open positions.
This is followed by an impulse upward price movement (unloading the positions of weak holders) and here the following options are possible:
1. Fuel has run out, open interest has closed
2. As a result of the impulse, the imbalance changed, and with it, open interest changed in the opposite direction.
3. The fuel has run out, but open interest remains, i.e. There are holders who suffer losses and do not close their positions.
I'm interested in the third option, because... it is from this that a trend can be formed. The trend will be when weak holders suffer losses for as long as possible, or, even better, average out their positions.
So, we have a trade, exit from it and wait for the movement to continue. This requires short sellers to average out at a loss. At the same time, they will have a certain average price for open positions. Anyone who averaged out probably noticed that in very rare cases they give you this price, and if they do, it’s not for long, so they don’t have time to close. In my opinion, this situation is what we need to look for. Graphically it looks like this: the price first rests on the average value or tests it (pierces it by several ticks). Or better yet, both.
And finally, a clear example. Gold futures. Friday 06/07/2013

The implementation is slightly different, because the position was taken not around the average price, but earlier. One contract was closed at local highs, the second was left with a stop at breakeven in the hope of significant growth, which, alas, did not happen (closed in a used one).


Well, here are some more examples of movement down from the average price:


Hope

Many traders consider futures trading to be the most professional way of Forex trading. What is a futures? This is a special type of contract, a security, if you like, which gives the right to purchase or sell any goods. So, for example, if a trader purchases an oil futures contract, then he receives full rights to this oil. By using a futures contract, there is no need to buy and sell the actual commodity, making a trader's life easier.

A futures contract's best friend is an options contract. Very often, a trader uses these two contracts together to minimize risks.

If we consider the futures contract in more detail, then it is a document that obliges the trader to buy or sell something at a given price after some time.
As for the option contract, it does not obligate anyone to anything, but simply provides such a right.

Unlike trading currency pairs on Forex, with the help of option and futures contracts you can carry out much larger-scale operations, and more opportunities open up.

In Forex you can also come across such a concept as an “index”. This concept means a combination of several goods, currencies and companies. At the same time, their overall indicators are calculated, the average is displayed and compared with other currencies or goods. Often the concept of “index” includes the largest organizations, the most significant world currencies, etc.

For example, there is an index called DXY (USDX). It shows how the US dollar is quoted relative to other world currencies, such as the Euro, Yen, Canadian Dollar, Pound Sterling, Swiss Franc and Swedish Krona.

In Forex there is such a thing as “index futures”. At the same time, you can enter into contracts for several goods and currencies at once, it all depends on what index it is.

On Forex you can find futures for American indices, for example, one of the most important is the DJI - the Dow Jones index. Thanks to this index, you can monitor how US industrial activity is developing. It should be noted that this index is the oldest among all currently known. Its founder is Dow Jones & Company Charles Dow. Today, this index includes the 30 largest companies in America.

There are also other significant futures for American indices, for example, the S&P 500 index. This index shows the activity of more than 500 of the largest joint stock companies in the United States of America. The shares of this company are listed on the largest stock exchange, NASDAQ and New York.

Futures trading (Russian trading system) has become quite popular and profitable today. At the same time, traders make forecasts regarding not just one company, but regarding the entire stock market. In order to start trading, you need to register with one of the brokers that provides such a service.

Of course, if a trader has a large initial capital, then trading can be carried out directly, without intermediaries.

You can trade RTS index futures from 10.00 to 23.50. This time is advantageous because an hour before the end of futures trading, the foreign exchange market in the United States opens, and it has a very powerful influence on both the stock and futures markets.

The behavior of the Russian market can be predicted based on such fundamental features as: prices for gold, oil, quotes of other important world currencies, as well as large companies.

The biggest advantage of trading index futures is the very low commissions. If we compare it with what is charged when trading shares, then it is 20 times less.

In financial markets, quotes for currencies, securities, stocks and other assets change daily. The difference between the purchase and sale prices is the earnings of market participants. By quotation we mean the price of a certain instrument, expressed in the monetary units of a certain state. You can track the dynamics of changes in quotes using online Forex charts.

What are currency pairs - direct and reverse quotes

The currency pair looks like this: the first is the base currency, and the second is the quote currency. For example, in the dollar-ruble pair, the American currency is the base one. But it is valued in the national currency of Russia - the ruble. Quotes can be either direct or reverse. In the first case, foreign currency is valued using the national currency. In reverse quotation, everything happens the other way around. In CFDs on oil, shares or indices, the price is indicated for 1 CFD.

CFD is a contract for difference. It allows the owner to buy and sell currencies and other instruments without physically owning the goods. In such cases, you can make money by trading without actually buying and selling goods. Thanks to CFDs, private investors can easily access the metals, indices and oil markets.

To make money on exchange rates, it is not enough to know the current quotes of the euro, dollar and other currencies. It is necessary to know the dynamics of changes in quotes over a certain period of time. This is why online Forex charts are compiled. With their help, you can track all changes in quotes over a month or more. After analyzing the information and drawing conclusions, you can start trading directly and make money.

Most American stock exchanges trade stock index contracts. Often, investors prefer to work with American futures indices, as this is the most cost-effective option compared to other indices. Among the American indices, the most famous are: Dow Jones, P500 Index, NASDAQ 100 Index, Russell 2000 and Russell 1000.

List of the most popular American indices

SP500 index - this index includes five hundred of the most liquid companies in the world, whose shares are traded on the world-famous NYSE stock exchange. This sp500 index appeared on the stock exchange in 1957, thanks to the active economic activities of the American company Standard & Poor’s. The p500 index represents large capitalization companies. Futures on sp500 indexes with the ticker sp can be purchased on the CME exchange at a price of $250. A less budget option is the minimum contract for traders sp500 index futures with the ticker ES for only $50.
The Dow Jones index is one of the most popular American indexes, thanks to which all others exist. He owes his appearance to Charles Dow. Futures for American indices are listed for sale on the CBOT Chicago Stock Exchange. Today, DOW includes more than thirty giant US companies and their shares, on which the entire economy of the country depends. As a rule, these companies are not permanent and may change. If previously Dow Jones included only industrial companies, now it has corporations covering completely different areas of the economy. The dow trading strategy is a profitable exchange instrument. Anyone who knows how to use it can make good money on their shares.
The NASDAQ 100 Index is a well-known American stock index that trades hundreds of stocks.
the largest companies in the financial market. The NASDAQ 100 is sold on the world famous NASDAQ exchange. Due to volatility and protracted trends, NASDAQ 100 index futures are a very popular type of trading for speculators. In use since 1985, when 2 new indices were simultaneously introduced: NASDAQ-100 and NASDAQ Financial-100. It is one of the ten most liquid futures in the world.
The Russell 2000 and Russell 1000 are popular US stock indexes that trade shares of two thousand small-cap companies and a thousand large-cap companies. The indices are calculated by Russell Investment Group. Futures on the Russell 2000 and Russell 1000 indices can be purchased on the ICE exchange with tickers TF and RF for $100.

Futures covering major economic sectors

You can also purchase other index futures corresponding to various sectors of the economy on exchanges:

S&PFinancialSPCTR - financial sector futures with ticker FIN;
S&PTechnologySPCTR – futures of the high technology sector with the ticker TEC;
E-miniNASDAQBiotech – futures of the biotechnology sector with the ticker BIO;
Dow Jones USRealEstate is a US real estate futures with the ticker symbol RX.
The concept of stock index and futures

To track the price dynamics of the market of a group of companies and their shares of any direction, stock indices are quoted.

A stock (exchange) index is one of the main indicators of the dynamics of growth or decline of shares, as well as any other securities that carry a certain value for the company. One of the most important indicators of a stock index is its dynamics. Based on the increase or decrease in prices, certain conclusions can be drawn regarding the overall development of any sector of the economy.
Futures are one of the types of exchange contracts for the sale of a specific type of stock, which can be reused in trading. These are certain financial instruments that set the price today for certain company assets that will be sold soon.
Often, stocks are traded on US stock markets in the form of index futures. Please note that high growth or sharp decline in stock indices makes it possible to track the position of dozens, and sometimes hundreds, of shares from its composition. The property of tracking stock indices attracts special attention from trading participants due to high liquidity.

Stock exchanges and their functions

Stock exchanges are a market that trades various types of securities. A currency exchange is not included in this concept, since there are special motto exchanges for trading mottos of denominations of various countries. Today there are about two hundred different stock exchanges in the world. However, the lion's share of transactions takes place in the world's largest stock exchange, New York.

Financial market concept

Futures markets are like a huge global auction where buyers and sellers set prices for major stocks and financial assets. Main Participants in such trading are usually called hedgers and speculators. The difference is that speculators trade by taking advantage of buying and selling prices, while hedgers work to protect the underlying assets of their companies and try to prevent their prices from falling in the future.

Helpful advice! If you want to start trading futures on American indices, you should familiarize yourself in advance with issues related to saving your money, options for action strategies, and possible risks of financial fraud. In America, all rights of investing persons are protected thanks to the laws of the federal government and the rules of the organization of financial markets.

How to trade futures

Futures on various indices - the main trading occurs through hedging. Hedging is a trading operation, the main function of which is considered to be a warning against all kinds of losses when conducting other trading operations. The main purpose of hedging is to reduce risk. Sometimes this can be quite difficult.

One of the most difficult economic actions is that index futures are profitable to trade, but it always has high liquidity, which is why it attracts so many people. There is an opinion that futures are something complex by definition, but this is far from the case.

Understanding CFD

CFD is a type of simplified financial leverage that allows you to operate in the financial market online. Thanks to it, you can achieve financial benefits due to the price difference between buying and selling shares without leaving your home or office. You just need to choose the right strategy of action. CFD allows you to carry out a full range of financial transactions online, making a profit from the right investments.

Thus, we come to the conclusion: most people believe that index futures trading is something incredibly difficult, but this is not entirely true. To have a basic understanding of the financial market, you need to familiarize yourself with some of the symbols of financial instruments. These concepts are simple and refer to financial levers that can be used to set prices today for shares that will be sold in the future. The most popular futures for American indices are considered to be: Dow Jones, P500 Index, NASDAQ 100 Index, Russell 2000 and Russell 1000.