Can someone explain to me DOW futures & their correlation to the DOW?

lucacrebbe

Active Trader
Jun 26, 2017
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Good afternoon.

I have two questions that I hope somebody here can help me out with...

  1. Are DOW futures the only pre/post market indicators to the next day's prospective performance? Is it a reliable analysis to use for that?

  2. If the futures appear to be positive, would a day/swing traders entry point for a position be more profitable for them immediately at market open or at some other specific time of that day?
Thanks
 

Enivid

Administrator
Staff member
Nov 30, 2008
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www.earnforex.com
Are DOW futures the only pre/post market indicators to the next day's prospective performance? Is it a reliable analysis to use for that?
No, stock market's performance does not depend solely on how its futures traded off-hours. The next day's performance will depend on the usual set of microeconomic, macroeconomic, sentiment, and news factors.

If the futures appear to be positive, would a day/swing traders entry point for a position be more profitable for them immediately at market open or at some other specific time of that day?
It is unlikely that you will be able to profit from stocks movement after a particular movement in the futures. What you can do is it treat the futures trading as the continuation of the session and use its price action and candles in your main-session analysis. However, you should do so with a grain of salt as the futures volumes are usually much smaller.