Possible to day trade ASX?

[brownbeagle]

I have recently become very discouraged having tried to find a way to day trade the ASX. For a while I was looking to trade the Bund, but the late afternoon open time didn't work well with my family life. I investigated the ASX and have found it's very expensive to trade the equities, and the spread between bid/ask on the options is too large.

By my calculations, if I traded CBA with 0.08% commission, I would need to make 12 cents just to break even :bang head:

Is this correct? Is there a way to day trade ASX with palatable risk/reward? Should I just start my own bucket shop instead?

Next step will have to be asian futures I guess.

 

[skc]

By my calculations, if I traded CBA with 0.08% commission, I would need to make 12 cents just to break even :bang head:

Is this correct? Is there a way to day trade ASX with palatable risk/reward? Should I just start my own bucket shop instead?

The calculation is correct. But 12c move on the $75 per share CBA is only 0.16%. So it doesn't sound that difficult to catch.

FWIW, I do regularly day trade equities. If I pay 8bps commisison, total commission / net profit would be around 43%. So overall it's still profitable but your commission drag is a lot heavier than other instruments.

 

[brownbeagle]

Thanks for your response skc. I think it's too much for me. I'll move on to asian futures.

 

[joshwelsh]

I have recently become very discouraged having tried to find a way to day trade the ASX. For a while I was looking to trade the Bund, but the late afternoon open time didn't work well with my family life. I investigated the ASX and have found it's very expensive to trade the equities, and the spread between bid/ask on the options is too large.

By my calculations, if I traded CBA with 0.08% commission, I would need to make 12 cents just to break even :bang head:

Is this correct? Is there a way to day trade ASX with palatable risk/reward? Should I just start my own bucket shop instead?

Next step will have to be asian futures I guess.

also consider the volatility of the asset you are going to be trading, if a particular asset statistical volatility is low along with the VIX then day trading is questionable, also do an ATR (average true range) on your asset class to see the ranges of prices on your asset if the range per day on the are low than question whether day trading is appropriate.

I personally hold the view that day trading is only to be done when the market is telling you (VIX) when volatility is up then day trading and shorter term trading is an option however if it is not than you need to expand your time horizon to capitalize on the increased movement of asset, i personally employ a top down systematic asset selection process in which i predict global GDP using economic indicators then drill down to industry and stock views using risk management procedures and hedge out risk by using spread trades primarily i only use technical analysis to time my trades and never ever do i get trade ideas from technical analysis.