Pros & Cons Of Equity & Currency Indexes
A quick video looking at some of the pros and cons of using equity and currency indexes.
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We gotta great question here from Joachim, Joachim is looking for a type of index that basically tracks all of the world's equity indexes something like the dollar index versus some of the major currencies like the one we track on the major pairs and also asking why we don't make more use of the all of the different indexes for the major currencies that we have available on trading view. So why we don't use the Aussie dollar index, the Euro index, the Pound index, etc.
So, coming to the first question, the Joachim, Yes, the MSCI world ETF that you have the the URTH, it can be one that you can use, the challenge of this one and that's the same reason or same challenge for the currency indexes, if we just quickly pop in your world MSCI, the one that you're talking about is the URTH and The ICEA's ETF now it's fine to use it as an overall tracker.
The problem is it only runs from the New York cache open. So you're always gonna have that little bit of a lag in terms of the actual data so you can, if you're gonna if you're comfortable with using it from the open, that is an option that you can use.
The other one that I used to use and look at is the futures option. So if you just pop in world and MSCI, if you look for FMWO, you can take the first continuous contract, there's fine, you can use something like the MSCI world index futures option of course, it will be delayed with 10 or 15 minutes, but it is a viable option to use for an overall view of world equities. Coming to the to the currency indexes, the same challenge applies really to them.
So if we pop in something like the Australian dollar currency index, it should be AXY, I think, yeah, there we go. So if we pop up an AXY you'll see it has this little jumps this little straight lines, and that's basically because this only runs it's from TBC. right? So all the currency indexes, if we typed in currency index you'll see all of them is coming from TVC.
And the challenge of that is it's not continuous contracts, is not a futures contract, so that little section is really the only section you can use forward each day. And that is when the New York cache open, is obviously open when it's trading. So for me during the day during the London session, is not really having, it's not really that useful, because you can track it throughout the day,
You can only track it from the New York session. Of course, when the New York session opens, then you can use it. One of the things that we currently building out is basically, a major layout like this one for each of the individual currencies.
So the ones we've built already is the one for the pound and the CAD, and it's basically a very simple layout where you just compare the pound against each of the majors.
So, you have the pound Aussie pound CAD pound , when you build this out always make sure to try and have the pound as the base. So instead of having euro pound, we have pound euro. So this can give you a quick view just by quickly looking at the up and down to see whether the pound is down or up across the board. And then you'll see on the right hand side, we actually do have the currency index, but again, it's really only going to be valuable from the start of the New York trading session, which does limit the use to some extent.
So, it is something you can use and the reasons why we don't use it be explained, but it can be a valuable tool to add from the New York open. And then turning to the the equities, you can use the MSCI world index futures instead of the URTH as an option that runs throughout the whole session, instead of just that, that option of the ETF that runs with the New York trading session alone.
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If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://bit.ly/2HFykNd
-----
We gotta great question here from Joachim, Joachim is looking for a type of index that basically tracks all of the world's equity indexes something like the dollar index versus some of the major currencies like the one we track on the major pairs and also asking why we don't make more use of the all of the different indexes for the major currencies that we have available on trading view. So why we don't use the Aussie dollar index, the Euro index, the Pound index, etc.
So, coming to the first question, the Joachim, Yes, the MSCI world ETF that you have the the URTH, it can be one that you can use, the challenge of this one and that's the same reason or same challenge for the currency indexes, if we just quickly pop in your world MSCI, the one that you're talking about is the URTH and The ICEA's ETF now it's fine to use it as an overall tracker.
The problem is it only runs from the New York cache open. So you're always gonna have that little bit of a lag in terms of the actual data so you can, if you're gonna if you're comfortable with using it from the open, that is an option that you can use.
The other one that I used to use and look at is the futures option. So if you just pop in world and MSCI, if you look for FMWO, you can take the first continuous contract, there's fine, you can use something like the MSCI world index futures option of course, it will be delayed with 10 or 15 minutes, but it is a viable option to use for an overall view of world equities. Coming to the to the currency indexes, the same challenge applies really to them.
So if we pop in something like the Australian dollar currency index, it should be AXY, I think, yeah, there we go. So if we pop up an AXY you'll see it has this little jumps this little straight lines, and that's basically because this only runs it's from TBC. right? So all the currency indexes, if we typed in currency index you'll see all of them is coming from TVC.
And the challenge of that is it's not continuous contracts, is not a futures contract, so that little section is really the only section you can use forward each day. And that is when the New York cache open, is obviously open when it's trading. So for me during the day during the London session, is not really having, it's not really that useful, because you can track it throughout the day,
You can only track it from the New York session. Of course, when the New York session opens, then you can use it. One of the things that we currently building out is basically, a major layout like this one for each of the individual currencies.
So the ones we've built already is the one for the pound and the CAD, and it's basically a very simple layout where you just compare the pound against each of the majors.
So, you have the pound Aussie pound CAD pound , when you build this out always make sure to try and have the pound as the base. So instead of having euro pound, we have pound euro. So this can give you a quick view just by quickly looking at the up and down to see whether the pound is down or up across the board. And then you'll see on the right hand side, we actually do have the currency index, but again, it's really only going to be valuable from the start of the New York trading session, which does limit the use to some extent.
So, it is something you can use and the reasons why we don't use it be explained, but it can be a valuable tool to add from the New York open. And then turning to the the equities, you can use the MSCI world index futures instead of the URTH as an option that runs throughout the whole session, instead of just that, that option of the ETF that runs with the New York trading session alone.
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
