When do we take Futures Outright open position and when do we take Spread positions?
The relationship between these 2 instruments or products above is NEVER fixed and NEVER constant.
They have a Dynamic non-linear relationship which at times they are seen to be moving in the same direction but at different velocity. At times they can be moving in the same velocity in the same direction.
Alternatively they can move in the opposite direction in the same momentum. Or different direction.
What we do know is we will need to understand when we flip out the spread trades and when we do not. When we use the Futures and when we do not.
Spreads have ceiling and a floor value. When the maximum threshold are achieved, they will reverse.
Like the Futures outright, it has maximum and minimum values for a reversal to happen.
Many things we will be able to learn from looking and studying the charts itself. \
All it takes is an open mind ... eyes .. to see and to think and plot the actions. Yes, it seems too simple but I guess that is how it works.
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