future technical analysis, or spot analysis

If I trade EUR index future, should I do technical analysis on the futures price movement or the spot price movement? if I should use future price movement then which month should I analysis?

Prompt month is typically the most liquid. Also, futures price moves typically act like a jump rope - front month is more responsive to news than back month (depending on the news). If you're doing day-trades, then it doesn't terrible matter, but if you're doing longer term trades, watch out for contract expiration.

For Globex contracts, check out www.cmegroup.com for more information.



But honestly, if you're asking these questions, you probably shouldn't trade.

In my opinion, you need to write out a complete trading system/plan which tells you when/why/how to enter and when/why/how to exit and then approach the market.

Asking others how/when to trade isn't a good thing. For example, if I asked others to tell me how to trade, when I messed up, I'd blame it on them and never blame it on my system! And in the long run, that gets me no where.

I appreciate your honesty. I am not trading yet. I just want to know if there is enought difference between future price and spot that requires me to do separate analysis.

Well, futures price has a formula for determining it's fair value from an academic stand point and spot price is kind of just a trading instrument.

Technical analysis difference? No. Fundamental analysis difference, yes. If you want to know the basic fundamental analysis of it, read below, else just know that if you're trading a moving average crossover or something, no worries. Just keep an eye on delivery dates and rollover before then.

Futures price = spot price x (1 + borrowing rate) ^ time borrowed, roughly speaking...

In other words, futures price equals the value of buying the spot in the market with borrowed money. Kind of confusing, but think about it. If oil is $90 in the spot market and futures rate is $100 for a year, and you can borrow money at 5% per year, you could borrow $90, buy it in spot market and sell it in the futures market, hold it for a year and profit $100 - 90 x (1 +.05) = $5.50 arbitrage profit (risk-free profit).

After inflation and transaction costs you would still lose add a few zeros and you're golden

I dont really understand what you mean though... How do you buy something in the spot market and sell it in the futures? , its not exactly ebay! A futures contract is completely different to a spot contract so how do you take one and sell it as another? Makes no sense

Dont think my broker would like it too much either

Im quite sure you're about to make me look silly... But please do!