FTSE still running after 5pm ?

[AceCobra1]

Just wondering, i was trading earlier at the IG Index website... when I clicked on the graph, it shows that the price still moves until like 12am then starts at like 6am in the morning ? I thought the trading times were 8 - 4.30 ? Shouldn't the price be 'static' then ?thumbsup:

 

[tomorton]

No, you're watching IG's quote for buying and selling the FTSE100 with them, not the underlying index itself. Outside 0800-1630 quotes continue to be displayed, and they follow the US markets, later the futures until London re-opens.

 

[AceCobra1]

thanks for the reply... so when the price changes, it isn't the actual index itself but something entierly seperate that IG implemented? And what do you mean by it follows the US markets? Because I thought FTSE is a uk market ?

 

[Splitlink]

thanks for the reply... so when the price changes, it isn't the actual index itself but something entierly seperate that IG implemented? And what do you mean by it follows the US markets? Because I thought FTSE is a uk market ?

Nevertheless, IMO, it is just as good to follow after hours Footsie as it is US tech. I hesitate to say the Dow because I don't know for sure but, probably, that, too. Footsie is open until NY close on Fins at the same spread. Afterwards, I'd leave it alone until next day open.

 

[AceCobra1]

but how does the us market affect the ftse when the actual ftse is close? Surely any price variation in the non working ftse hours doesn't affect the actual opening price of the ftse the next day? Or am I missing something ?

 

[Splitlink]

Because the spreadbetters probably consider that the Footsie follows the Dow. I am willing to trade Footsie rather than the US tech because it is at around 2.5-3 times more and moves accordingly but half of the Dow, which makes me nervous! You watch it and come to your own conclusions, there is very little difference in movement, porcentagewise.

 

[tomorton]

You are missing something - the USA. The US market is the biggest by capital traded in the world. If the US goes up, we will follow. Say the US markets are at a certain level at 4:30pm when the London Stock Exchange ceases trading for the day, e.g. the Dow Jones Industrial Average, is 10,700. As New York is 5 hours behind London, the US markets keep trading until after 9pm. Suppose the Dow is driven up to 10,850 after London closes. It's highly likely that the FTSE100 will open at 8am next day significantly higher (actually about 150/2 = 75pts).

But if you're an IG customer, you can keep buying through the evening and through the night, but naturally, the price you will have to pay will rise, because IG aren't wanting to give anything away - they're like a retailer who just got a call from New York to say everyone's going to be buying tomorrow, so they're certainly not going to announce a cut-price sale.

 

[tomorton]

PS - These are fair questions for a beginner to ask but you shouldn't be trading with real money yet.

 

[AceCobra1]

if i am using these moving averages and bollinger bands in the graphs they provide, would it be relevant for day trading of the FTSE or are these more appropriate to be used with forex ? or perhaps longer terms ?

 

[AceCobra1]

i appreciate the replys... I'm a total noob lol... so say FTSE closes at 6650 today.... then Down closes 150 points high at 9pm (so lets say it causes the FTSE to go up by 75 points)... does it mean that the next morning at 8am, when the ftse opens, it will open at 6650 + 75 points and not the actual closing price which was originally at 6650 ?

 

[tomorton]

i appreciate the replys... I'm a total noob lol... so say FTSE closes at 6650 today.... then Down closes 150 points high at 9pm (so lets say it causes the FTSE to go up by 75 points)... does it mean that the next morning at 8am, when the ftse opens, it will open at 6650 + 75 points and not the actual closing price which was originally at 6650 ?

Roughly yes, unless there's some really bad news soon before the London open.

e.g. the FTSE100 closed last at 4:30pm Friday night at 5508.4. It opened on Monday at 8am at 5538.1, 30pts higher. Actually, FTSE opening prices are quoted differently by different data providers - some just quote the previous close as today's open: others quote the price reached at 2 or 3 minutes past 8 as the open. It is more realistic to use data that shows the gaps, just don't bet your life on the actual numbers.

 

[AceCobra1]

thanks... and can i use the help of the moving averages and other techinical analysis progams to determine the possible trend if i'm just doing the daily trading or would it be irrelevant as the given data would be relatively volatile for the day ?

 

[tomorton]

No simple answer. e.g if price is going up for the last 10 days and is above the 14 day moving average, which is also rising over the last 10 days, then the trend is clearly up.

But if your trade is going to last only 20 minutes, it doesn't make any difference.

Of course, even if trade is up and on day 10 of the uptrend you buy, price could go down for the next 10. It's what makes the whole game so enjoyable.

Don't put money in yet, go here:
http://www.trade2win.com/boards/first-steps/89078-essentials-first-steps.html

 

[AceCobra1]

thanks for the link... i will have a look now...

but see when i look at the graphs at ig index, i normally put it to a 5 mins/ 1 min graph as a daily graph wouldnt move 'real time' if you know what i mean... so what i ment was would the 20, 50 and 100 day moving averages be relevant in the decission making if the graph i am provided with are 5 mins and 1 mins graph in which there is such a wide variation in the timescale ?

 

[tomorton]

No.