Posted 1/17/2016 22:07 (#5043790 - in reply to #5043648) Subject: RE: Question? Blu, Fry others
Frytown, Iowa
Maybe this example shows what your saying? The first chart is continuous and shows the current contract expiring to the March and a gap lower to the bottom of a range. But the futures contract March excludes that swing because there was no actual contract price movement...
Therefore there is one more swing shown on the continuous that is not on any other contract.
J actually told me something like this a while ago. I agree with him. That the continuous chart is actual price. It is the "boss" chart. All other futures charts are based off of the continuous plus risk or carry or whatever but the foundation of the chart is the continuous.
Using that as your foundation I always look to the continuous to make a trade and work off of futures by adding in the spread between the two contracts to find the targets. Yes the expiration dates trip me up in fact this exact scenario I'm giving in the charts is an actual trade I was going to make. I wanted to short soy based on the continuous chart and while I was sitting there eating my lunch and drawing up the trade the next bar showed the expiration... I thought I missed the trade. On the futures chart it didn't show and I soon added up the drop was the same as the spread between the current month and March. Stuff like this keeps me humble and I know I'm still soo green...
Anyways nothing is perfect. I find that same rules apply to the futures as the continuous but sometimes things show up on the continuous that don't on the futures charts...
Question? Blu, Fry others
