Hello all - I have been trading the indexes the last few years and have recently moved over to the futures currencies. I base my trades off the Spot market via the futures contract through the CME. Of course, I use the $index to give me an overall view of the dollar sentiment. I understand there are $index futures instruments provided by the NYBOT and CME. Do any of you trade the $Index via either of these exachanges? If so, how has your experince been. I am a little worried of doing this because of some of the things I heard. From what I understand, the NYBOT does not have an electric contract so all orders must be sent to the trading desk and have a broker work the order. I am a bit scared of this. With the CME, there isn't much volume and liquidity offered. Do you think it is better just to trade the futures with the weighted allocation of paticular futures contracts (i.e. Euro...) I would think most traders are trading this way. Any help would be greatly appreciated. Thanks!
dollar index in NY is where it's at. you'll get a fair fill. you'd be surprised at who trades there. it's a wider market than imm but it's a different instrument as well, serving a different purpose. building the index yourself will take the edge out of the futures for you -- execution costs, time consumption, etc.
Thanks for the reply. Do you mind going into more detail about trading the $Index. I agree with you regarding the futures currency allocation. I understand many use it to hedge their positions, however I thought I would investigate trading it outright rather than allocating different futures contracts. PLease share, I do appreciate it!
well, that's pretty open ended, but I'll give it a shot. it's a good market. you already know that slippage may be greater. on the other hand, I've seen a thousand lots get traded at one shot on a limit. one thing about the index -- and it's true of the currency markets in general: a) they're in play and will be for some time, in my opinion; b) I've seen them turn on a dime -- that is, I've seen the cash turn on a dime and go vertical. Risk control is therefore (as always) paramount. I see it getting deeper and more liquid and a very opportune market.
Though I am new to the $Index, I also feel this market will become more liquid in time. My whole issue is that I use to trade equities, then moved over to the Eminis and Minis since it was a lot less of an issue to follow. Now, I would also like to do the same with the $Index. Since there is not an electronic contract, do you feel that funadmentals only play a role or is it a combination of both technicals and fundamentals? Also, do you know of any other resources regarding the $Index besides just the NYBOT website. Thanks for your help. Please share as much as you can
of course technicals work -- technicals were around way before electronic markets, dude! But it's fundamental, too -- interest rate driven. Watch the spot and see how the index works with it.