I would like to maximize my "understanding" of the market price action before building certain strategies. Anyone aware of a book, a thread, or any info source that would talk about and explain (preferably with real market examples) the likely players in a particular price action in the recent years futures (or equities) market? E.g. Breakout from Day high jumps due to retail investors, vs pull back from spikes - by algos. Channel breakouts - what causes that, other market (e.g. oil) extremes derailing beautiful patterns of SP500, Last 10 minute of the trading day - huge pumps or dumps - investment bank brokers (e.g. JP Morgan) buying up the number of shares they planned for the day, etc. I hope my question is not too Naive, I am even open to a mentor (a legit one, aside from many jokes I will get on this) paid hourly - if such available.
Nothing magical about index futures. They merely mirror their underlying index... sometimes they apparently "lead", but that's just because the futures markets reflect change faster than the tape.... not likely something you can arb.
Good point, I guess I should have said - "the core market instrument" - index or what not. Said e-mini because it is one of the most liquid ones, and thought if anyone wants to buy or sell "the market" - that's what they dip in...
Its one of those 10,000 hours of study kinda things. Not a mentor, not in a book and not in a video. No shortcuts. Sorry.
Learning to trade with a mentor is not like by the hour or week or month, more like 1-2 years. Intraday trading very difficult to grasp and memorize quickly. Mentor might steer you away from much but not teach you set system but a concept and teach you how to adapt to volatily changes. Signals should be learned last with emphasis on risk management first. IMHO
No. Both markets can lead. Futures and dark pools / listed. They are linked via the index basis, which traders call the PREM, or premium. Liquidity providers facilitate trade in both markets by trading this spread. They are exchange members, with colocation and HFT infrastructure. They will be the only ones doing cash-and-carry and reverse cash-and-carry arbitrage. (related: EFP trade volumes) They quote a two sided market in the futures based on the underlying liquidity. (and probably the opposite, i.e. make a market on the listed/dark pool against futures liquidity.) The difference between the front month index future and the underlying (dark pool and listed) is a spread that is based on a pricing model involving a forward dividend and a funding rate).