By the way, what kind of things do you mean when you say trading systems. I know TA stuff and for example notice that 200 day moving average is very strong resistance for FTSE and that the DOW often settles at the end of the day at critical support or resistance levels such as 10 900 today and finally that 1:30 is often when the action starts on the DOW as people come back from lunch. Is this the kind of thing? Or is it more complicated using several indicators, computer etc. as well?
I was thinking some time back, that surely a computer would be able to trade the indices much better than a human being once fed with all important turning points and figuring out ones of its own. Furthermore, staring at numbers for a few hours every day is boring (although exciting for other reasons) and makes me feel a little sick about how I spend my time. Surely a simple program would work on the currencies which would involve simply buying when prices are cheap and selling 50 points later. Since the currencies oscillate so much, this will almost always turn in a profit eventually with a sufficiently healthy balance to start with .... The problem is: isn't that the same with everything? You risk the big losses, but I somehow prefer the idea of high percent win as opposed to maximizing size of wins. It feels safer somehow. Of course it isn't! These are also the sort of trades which you stand over and look after. I need to try and learn to come to a decision only place a small bet on it, and go away confident that the decision will be more often right than not. Does anyone out there just trade on a day-to-day basis? Trading the DOW on a day-to-day basis is a scary prospect. The FTSE on the other hand is much less predictable intraday, but seems to behanve more sanely in the medium term. Any comments?
About futures, they have to cling to prices. So even if everyone thinks the index is going to go up, the future will not rise by too much above the price, or people would sell the future and buy the underlying index for a guaranteed profit. What I seem to find is that the future is a prediction of what the price is going to be in a few minutes time. If the market starts falling, the future will fall faster which is slightly annoying if you are long. The difference which does exist between future and price is to counteract the loss of value of your capital as it waits for the future to expire (no interest etc.) One thing I don't get is this:
Why is DOW future _above_ DOW price, but NASDAQ future _below_ NASDAQ price? The latter does not make sense to me. We all know the NASDAQ has a bad name, but still!
Any help or advice on above much appreciated!
Anyhow, it's getting late! See ya!