6years ago, there was a major study on relationship between future & Stock price. The conclusion was; 1. Future & Stock gap time is about 2 sec Why? When maket makers receive an order(large amounts) from major institutions like Merill or mutual fund companies, the market makers' firm immediately buy on future, & excute the institution order. 2. Major trading firm already knows the co-relationship between future & stock price. Bright trding firm who excute 4% of NYSE daily, have a live broadcasting future market system at their trading offices to beat the 2sec gap between future & stock. The real time future quote always late compare to live broadcasting of Future exchange floor. After all, those professional traders always buy & sell in 30 sec for 4 cents profit. So, the 2 sec gap makes the difference of profit or loss
If this is true, looking at futures would be a waste of time. Don't some of you scalpers trade off the futures? Successfully? I would love to get to the bottom of this issue. I've heard so many conflicting thoughts. I don't see myself scalping from home; otherwise I would test this out myself. Any thoughts from those of you who follow futures?
Anybody use 5min, 15min, or daily chart, do not need live broadcasting future quote. However, those who trade for 10 sec - 30 sec for a dime of profit, live future broadcasting might help(if you understand the live future floor shouting voices) Listen to how Merill future traders shouting.... Why they are desperate to buy big future order time to time? Answer; a big order came through Merill(from a mutual fund co).