Hi! I am from a forex background - having worked for 3 years for a forex systems developer. Recently I started investigating how Elliott Wave Analysis works on various types of markets. After having examined over 50 different instruments/timeframes I came to the preliminary conclusion that the Forex market is inferior to the Stocks/Commodities markets in terms of average Reward/Risk ratio you get per Elliott Wave Entry (second conclusion is that weekly and hourly charts are both inferior to the daily charts for this type of analysis). By this entry I mean capturing either the 3rd or the 5th waves of an impulse sequence. It looks like the Forex market is more efficient or rather slow in this regard and doesn't allow for a strong move to develop fast enough to lock in enough profits for a higher REWARD/RISK. This might be because the heterogeneity of the market participants for some of the lesser traded currency pairs is low....even if they trade large sums of money - thus the choppiness they demonstrate. My question is, therefore, what are the most liquid markets in terms of heterogeneity of the market participants and total volume traded. Not volume alone - which would give the FX the first place immediately. Thanks!!! Dima PS: SHORT VERSION OF THE QUESTION: IS THERE ANY RELIABLE STATISTIC ON DIFFERENT MARKET LIQUIDITY?
can anyone also recommend any thorough book on various types of market instruments that can be traded other than forex... thanks!
Top futures contracts by liquidity (in USD notional value): 1. E-mini S&P 500 - CME 2. S&P 500 - CME 3. CAC 40 - Euronext 4. KOSPI 200 5. Dow Jones Euro Stoxx 50 - Eurex 6. DAX - Eurex 7. E-mini Nasdaq-100 - CME 8. FTSE 100 Index - Euronext 9. Nikkei 225 - OSE 10. Topix
most liquid by number of contracts traded: 1. mini S&P (ES) (2.000.000-3.000.000/day) 2. ESTX50 (1.500.000/day) 3. BUND future (1.000.000/day) (other interest derivate futures: Schatz, US futures) then come all the other futures....
multiplying the # of contracts by their tick value would give you a trade value for how many dollars the point move is on average....
thank you for your replies...do you think there is some centralized site with information on on liquidity of various markets?
maybe the original question should be: in which markets and on what timeframes does Elliot Wave work. imo, it isn't worth the trouble, most people who use it need alternate counts and backups for those ... that says enough ! forex is the most technical and liquid market I have ever seen, but if you use the wrong tool to trade it, that won't help