Using futures as an indicator - Fidelity

How to foresee the trading schedule

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Futures Stocks Most Voronchikhin trading who how to foresee the trading schedule attention to the financial markets realize that what happens in Asia and Europe may affect the US market. In a global economy, what happens overseas may drive markets.

What is Forex?

The indexes are a current live representation of the stocks that are in them. This time gap is what causes our markets in the US to gap up or gap down at the open because our stocks have been traded at the exchanges around the world and have been pushed up or down during overseas markets.

Things Affecting the Stock Market Over extended periods of time, the stock market tends to be a good investment, making money for buyers who diversify and hold onto their stock patiently.

An indicator that tracks the markets 24 hours a day is needed. This is where the futures markets come in.

Key Takeaways Trading stocks takes an abrupt halt each trading afternoon when the markets close for the day, leaving hours of uncertainty between then and the next day's open.

The index futures are a derivative of the actual indexes. Futures look into the future to "lock in" a future price or try to predict where something will be in the future; hence the name.

The futures will move based on the section of the world that is open at that time, so the hour market must be divided into time segments to understand which time zone and geographic region is having the largest impact on the market at any point in time.

The global cycle The first markets to open are the Asian markets including Australia and New Zealandwhich trade between — ET. Europe opens at and trades until ET.

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However, Europe is still open and trading for the first 2 hours of the US market; so during the morning session of the US markets there is still European influence.

As the US markets close, a new day is starting over in Asia.

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And the cycle begins anew. The Asian, European, and US markets are on the chart on the left.

What approach should investors use to predict forex movements?

The futures opened and started trading higher in Asia, then began to weaken. Europe then opened and pulled the market down. The US then opened and began to retrace as Europe closed. Notice the gap in the chart on the right. This is what is referred to as a "gap down" at the open, yet there really was no gap based on how the futures traded. Not really. Some would say that the cash stock was down to "reconcile" it back to the futures.

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Again, no, because the stock had already traded lower in the European markets. Foreign companies stocks traded on local exchanges.

Likewise, US stocks trade on foreign exchanges.

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Turn on early morning business news to see the ticker of stocks "during European trading. In conclusion You don't have to trade futures to understand what the markets are doing globally.

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Global markets move on news and it can be seen in the advancement or the decline in the index futures as stocks trade around the world. For information on what the market will do when it opens at ET, the index futures are one indicator that offers important information as we approach that open. The market may never sleep, but you don't have to stay up all night wondering where stocks might be when you get out of bed.

How to predict forex movements How to predict forex movements Predicting the direction of the forex market is not easy but traders have more tools and resources at their disposal than ever before. We look at the tools traders can use to try to predict forex movements and exchange rates. Joshua Warner Writer, London Foreign exchange, more commonly known as forexis the most traded market in the world. There are only two drivers of forex: supply and demand.

Just look at the index futures. Next steps to consider.