The continuous chart is stitched together

This is the most valuable thing in the module, and it is barely taught anywhere. If you take one idea from these nine lessons, take this one.

Nothing you are looking at traded for years

A futures contract expires. The December contract stops existing in December, and the March contract - a different instrument, with its own price - takes over as the one everyone trades.

But your chart shows a continuous line stretching back years. It was assembled. Somewhere in it, repeatedly, one contract's prices stop and another's begin.

The join is not a move

The two contracts do not price at the same level. A contract settling further out embeds more financing and fewer dividends, so it typically trades at a different price from the near one at the same moment.

When the chart switches, the level steps by that difference. Nobody traded through the step. No participant made or lost money on it. It is an accounting boundary that looks exactly like a price move, because it is drawn with the same line.

Two conventions, and you must know which you have

• Unadjusted: contracts are concatenated as they traded. Every historical price is real, and there is a visible step at each roll.
• Back-adjusted: history is shifted so the join is seamless. The recent end is real, the joins are invisible, and older prices no longer equal anything that ever traded.

Both are defensible and they fail differently. Unadjusted gives you steps that look like gaps. Back-adjusted gives you a smooth chart whose old levels are fiction - shifted by the sum of every adjustment since.

What goes wrong

A support level from eighteen months ago, drawn on a back-adjusted chart, may sit at a price the current contract has never printed and never will. It is not a weak level; it is not a level at all.

An indicator averaging across a roll includes a step that no market participant experienced. A backtest run on an unadjusted series sees a gap every quarter, and if it trades gaps it will trade those - the most profitable pattern in the data will be an artefact of the data.

Volume falls away at each roll as interest migrates to the next contract, which reads as fading participation and is nothing of the sort.

How to tell what you are holding

Pick a date more than a year back and compare the chart's price against what the contract that was live then actually traded at. If they match, the series is unadjusted. If they are offset by a suspiciously round-ish amount, it is back-adjusted.

Or look for the steps. On an unadjusted index series they recur at quarterly intervals, always at the same points in the calendar, and always in the same direction for a given market.

Reading it honestly

• Know which convention your platform gives you. Most do not say.
• Treat levels older than the last roll with suspicion, and check them against the current contract before relying on them.
• For anything near-term, read the contract you are actually trading rather than the stitched series.
• Distrust a pattern in long history that lands at regular calendar intervals.

What rolling costs, and when to do it, is module 3 and the futures track. This lesson is only about not mistaking a seam for a move.