Curtis Faith - The Original turtle

Curtis faith has a very interesting insight on the different markets and how they behave and probably why.

I believe that there are actually three classes of markets which behave distinctly differently:

1) Fundamental Driven Markets - These are markets like currencies and interest rates where the trading itself is not the primary force behind the movement. As time goes on this seems to be less and less true but I'd argue that the Fed or country-specific equivalent and a country's monetary policy still influence prices more than speculators. These markets have the greatest liquidity with the cleanest trends and are the easiest to trade.

2) Speculator Driven Markets - These are markets like stocks, futures such as coffee, gold, silver, crude oi, etc. where speculators influence the markets more than governments or large hedgers. The prices are perception driven. These markets are harder to trade.

3) Aggregated Derivative Markets - These are markets where the driving force is speculation but that speculation is diluted because the traded instruments are not what drives the price. A good example is the e-mini contract. It moves up and down but it's range is constrained by the underlying index which moves only indirectly because of speculators. It aggregates the purely speculative moves of many instruments so you get an averaging out and a dilution of momentum. These markets are the hardest ones to trade.