Deciphering the e-mini futures price action

yoyotrader said:
I 100% agree with you on those pieces of advices - having right way to search it. I am already trying that.
In case someone has already invented the bicycle - I wanted to tap into that.
Good example is the "Encyclopedia of Chart patterns" - by Bulkowski - that I own, that pretty much covers vast majority of knowledge you can find scattered on internet, but it's about chart patterns, not about the players monkeying around with it.

My only practical follow up question for you would be this: What search term would you use @ET or in Google to find what I am looking for? "Decoding futures price action"? I have tried a few combination and have not really come to the type of info I was looking for...
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Your initial question was loaded with many different topics. I don't think there will be a key phrase to use for finding all those topics.

Thus, select one topic only and search it on Google / Bing...gather all the info you like. Next, do the same for your next topic and so on until you have the info you need and contact info.

I wouldn't be surprise is some of the search results leads you back here to Elitetrader.com even though it may not have been found via the ET search all by itself.

wrbtrader
 
Fx-Game said:
May I ask where you actually studied it?
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If you are a serious student of finance, you can learn this stuff in any good textbook on derivatives pricing. It's also part of the CFA institute testing curriculum (level III). A CFA title means you work (or have worked) for a regulated firm. I'm mostly self taught.

I've heard traders call this the most important differential in the entire market. I don't disagree with that, and the fact that you can derive a funding rate from it backs that up.

The trading in rate differentials (also called "yield spreads") will affect change in the the risk free rate, and therefore the futures premium. This means that treasury moves can and will move ES.
Fx-Game said:
Why not teach few people how that works?
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I'm talking about it just to add value to the forum and because it helps me review things I've already figured out. Most traders don't care about this stuff or don't have the background and/or aptitude to learn it.

My edge is related to this topic, that's why I can talk about it in detail.

Some guys on the forum know this stuff. ET members like sle and Maverick74 know all about it. Actually, Maverick74 even knows what index calendars are arb'd against. I don't think that one is on the CFA curriculum. :)
 
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Fx-Game said:
I always had the same question:
In which way is the spot market (real) linked to the future exchange...
How is the price of the index, e.g. S&P, created?!

Stocks are the ones that move (on buy/sell order) but they are being traded on 'spot' exchange.
Now there is a 'spot index', and a futures index, and both must have the same price.
As soon as there is a gap, it is being filled by arbitrage traders/algos, that take care of it.

Is that right?
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Technically, S&P 500 should only respond to the 500 of its stock components. However, if you've witnessed the 2001 Flash Crash, that's not the case at all. As it turned out, that particular event happened due to the massive movement in the S&P futures. That explains the futures market can indeed influence the spot market.
 
schizo said:
Technically, S&P 500 should only respond to the 500 of its stock components. However, if you've witnessed the 2001 Flash Crash, that's not the case at all. As it turned out, that particular event happened due to the massive movement in the S&P futures. That explains the futures market can indeed influence the spot market.
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Do you trade the eMini or any of the other index futures?

Because this is really basic stuff. The daily interplay between the spot (cash) and the futures, one affecting the other back and forth is continuous. Just like between the bulls and bears.

Not only during particular market events.
 
I understand the interplay of the different instruments that are all tied to each other. WHat I was not sure about - is 1) Which one of those instruments is THE first to change - that automatically affects others, if there is such. and 2) Any courses, videos - that go over real market examples and pointing out things like: Here big players are setting the Keltner chanels and the retail trailers are hichhiking.... or here Algos are stopping out retail traiders, etc.
 
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