Preparing For Day Trading

[CanOz]

You have to work hard enough to beat the market let alone trying to beat these guys too at their game.

I thought that this was worth repeating, well said WP.

Cheers,

 

[It's Snake Pliskin]

It's still an option. Just not my preferred one.

I would rather trade the indexes because I am more familiar with the short term strategies for these, rather than for individual stocks. And the CFD providers for mine don't offer this adequately.

I also don't like the interest payments on CFD's, and would like to lessen brokerage if I could. And I would prefer not to keep positions overnight on CFD's, if they haven't hit my stop or my exit, and would worry potentially about the liquidity in closing out positions...

If you are DAYtrading surely interest isn't going to be an issue.

 

[chops_a_must]

My 2 bobs worth:

If you just want to do indexes, futures are the way to go, hands down. Options will cost too much in the spread.

Generally you need to deposit $5k to open a futures account, but presuming you will be trading the SPI, I would suggest you need about 20k per contract traded to be adequately capitalized. You could start with less of course and many do, but not what is recommended.

Thanks. That's the sort of advice I really wanted to hear.

CAM.

If your provider isn't with the times, and doesn't provide you with what your need, why stay with them.

I'm attached to the best platform n tools to trade, and never the provider. (but good provider are a bonus).

Anyway I trade the SPI Index (mini 200 forwards), don't pay any interest for holding overnight, just a 3pt spread (1.5pt either side of actual spread) for in&out.

I refer to a mini, as it costs $5AUD for 1contract, as opposed to $25AUD for 1 Full contract which is can hurt if you just learning and get it wrong.

There are plenty of indexes like the SPI that offer mini contracts, as opposed to full contracts, and don't attract any interests overnight, whereas their 200 forwards Cash contracts you only pay 2pts in&out, but attacts overnight interests & is dividends built into the price are adjusted daily for overnight holds.

I was initially was cautious towards cfd's because of listening to many, but put all their fear aside, and signed up just trading 1 mini contracts.

The tools are 2easy to use, and now have the ability to trade short, without all the complexity of options

Also if you trade any world indexes, their is no costs for data feeds like the asx imposes when you trade ASX share cfd's.

Hope that all makes sense, as new to CFD's as well.

Cheers
SevenFX

That would be $5 per point yes? I'm not really interested in doing foreign indexes as yet, as I don't want to have to deal with gold etf's etc...

So do you trade futures on the same platform as the CFD platform? Or do you use the CFD to trade an MM index?

CMC has a great trading platform, and i use it, but that is where the good ends and the bad begins.

While you may not appreciate or understand my words; Ignore them at you own peril
They can be beaten, but can you be bothered

Nope. I don't want a bar of CMC. And this is the reason I don't want to trade indexes via way of CFD unless it is the actual underlying index. Market makers as opposed to DMA are outright thieves.

 

[chops_a_must]

To me if you really want to be successful trading indexs you must have an egde. If you are a beginner (as i am) i don't think you can just trade by feel taking advantage of multiple 'edges' when they present themselves.

Take pivot points in different time frames for example...if thats your edge then to me to be successful, you need to just focus on using them when they setup properly. Figure out how many losses you can take in row to ruin you completely and then trade that plan only.

Once you get trading you will notice more things to research to give you more 'edges' to exploit.

Brent Penfold lost a few accounts before he became successful, his book 'Trading the SPI' is a must read for any want to be index traders.

On CFD's, its ok to learn to trade and see how the markets interact with each other, but i'm saving up an account to trade real index futures, no ridicululous spreads to put up with.

I will however, have my edge tested and ready to apply when the time comes.

Frink, Edwood, TH, and TI seems to all have little edges they use in different time frames, i always read with interest what they are up to. Trading indexs on short side has in my little experience been the most probable way to trade, as the moves down are so sharp, and the reversals a little easier to see.

Cheers Chops and good luck,

Thanks for the post. I'll be looking at using pivots and fade plays mainly, particularly on confluence/ cluster points.

But like I've said, because of the way my work is, I won't be able to trade everyday, but it also means I don't have to force trades as I'm not reliant on the income...

Thanks for the well wishes mate.

But at the end of the day I want to trade actual Index future away from IG and MM.

Prep for day trading:

Have a crack, play small until you can get a basic feel. Things move fast on intraday so become objective and learn to change your views very quickly.

Good trading.

Mmm, sounds like we are looking for a similar thing...

Thanks for the tip. It's what I did with stocks, and that worked. I've proved to myself I'm not going to melt in crunch times, so it's time for a new avenue.

But I have the time to experiment and learn, and just want to make the first steps towards starting that now...

Very well said Juiceman, my sentiments exactly. I realised this quite quickly and gave them the finger!!

I now trade through Global Forex Trading who in my opinion have a better platform, but also have also found less of the crooked business that I had with CMC. You have to work hard enough to beat the market let alone trying to beat these guys too at their game.

Lol!

That post reminded me of an old skit on Fast Forward about "Eastpac" for some reason.

But that brings me to the next question I guess... futures brokers for Australian indexes... or CFD providers trading the actual indexes (if they exist). Suggestions?

 

[>Apocalypto<]

But that brings me to the next question I guess... futures brokers for Australian indexes... or CFD providers trading the actual indexes (if they exist). Suggestions?

Chops,

I know for a fact that Pacific Continental Securities have CFD's over the actual XJO not MM its open 10-4 and they have the actual Dow Jones and S&P500 but again its normal market hours so late nights!

here is there web addy Chops: http://www.pacconsec.com.au/

ok the break down on the XJO its 5% margin of the index value, x .1% of the value for brokerage you receive 1$ per point per contract. Plus u pay interest.

I have a account with them Chops. they're helpful guys but i have not made a trade with them yet as I like the idea of 5$ per point for 350 a contract + no brokerage, yes call me greedy.

funny all these CFD brokers all have award winning platforms were are the award ceremony's, thats what I want to know!

good trading

 

[chops_a_must]

Chops,

I know for a fact that Pacific Continental Securities have CFD's over the actual XJO not MM its open 10-4 and they have the actual Dow Jones and S&P500 but again its normal market hours so late nights!

here is there web addy Chops: http://www.pacconsec.com.au/

ok the break down on the XJO its 5% margin of the index value, x .1% of the value for brokerage you receive 1$ per point per contract. Plus u pay interest.

I have a account with them Chops. they're helpful guys but i have not made a trade with them yet as I like the idea of 5$ per point for 350 a contract + no brokerage, yes call me greedy.

funny all these CFD brokers all have award winning platforms were are the award ceremony's, thats what I want to know!

good trading

It doesn't look too bad... but the spread seems the same as the IGXJO. It doesn't even appear to have a monthly fee. Will have to ring them about that though...

How much is the value of the XJO contract in real terms now? Is it $1 for every index point?

"ok the break down on the XJO its 5% margin of the index value, x .1% of the value for brokerage you receive 1$ per point per contract. Plus u pay interest."

Is that the standard futures broker rates or for the CFD index rates? Because it appears on that site as if they only take the spread as their payment...

 

[>Apocalypto<]

It doesn't look too bad... but the spread seems the same as the IGXJO. It doesn't even appear to have a monthly fee. Will have to ring them about that though...

How much is the value of the XJO contract in real terms now? Is it $1 for every index point?

"ok the break down on the XJO its 5% margin of the index value, x .1% of the value for brokerage you receive 1$ per point per contract. Plus u pay interest."

Is that the standard futures broker rates or for the CFD index rates? Because it appears on that site as if they only take the spread as their payment...

Yes Chops they have a spread and brokerage. The main difference between them and other CFD providers is their is contract is on the actual index no fair vale added to the SPI to guess there over night prices and after hours premarket prices.

I asked IG why they dont make a 10-4 XJO (the exact xjo) they told me it was to add liquidity. Like I said, at the end of the day I will become a futures trader only and trade the SPI but for now the IG XJO is ok to me.

As far as I know on the SPI, there is 1 point spread and you pay brokerage around 10$ in and out but I am sure there may be cheaper.

XJO is 5936 x5% = $296.8 per contract brokerage is 5.93$ and you will receive 1$ per point per contract.

Main advantage of this contract in my view is it's 10-4 normal market hours.

Do some digging Chops.

Good trading.

 

[ducati916]

In the US daytraders are commenting on the return of the good [bad] old days. One that I follow had these stats on Friday 10 August;

Shares traded ......173,000
# stocks................44
Winners.................25
Losing...................19
#Trades................708 [seven hundred and eight]
P/L......................+$10,528.00

Even I, a snail by comparison, on a swing trading method from 20 July have noticed an incredible upturn;
#Stocks................6
#Trades................81
P/L......................+22%

Daytrading, wild days, good if you know what you're about, bad, if not.

jog on
d998

 

[CanOz]

But that brings me to the next question I guess... futures brokers for Australian indexes... or CFD providers trading the actual indexes (if they exist). Suggestions?

I'm just switching over to Interactive Brokers. Let you know how i go.

Cheers,

 

[It's Snake Pliskin]

Daytrading, wild days, good if you know what you're about, bad, if not.
jog on
d998

Nice line Duc. There is a lot in that. Sadly most will breeze over it.

 

[chops_a_must]

Brent Penfold lost a few accounts before he became successful, his book 'Trading the SPI' is a must read for any want to be index traders.

Thanks for the heads up.

I ordered it last night. Should help me with broker selection and give me some more strategies by the looks. No doubt I'll have a more clear idea of everything after I have started reading it.

 

[zengin]

Hi Guys

Now I am even more confused.Started to read the thread so that I have some sort of understanting of index trading but I think I am lost.I have few questions hope you guys can help me.
1- why choose index trading over others eg stocks
2-what about Emini's
3-does IG do Emini's
4-when trading indexis can you trade 24/7 eg Aus 200,S&P,Dow
5-do you only need say IG plathform to trade these or do you need to down load other programs
6- If you are day trading why not put stops , so you are not glued to your PC
Some of these questions may be stupid but I dont have much experience I am hoping to learn from you guys.
Thanks

 

[Trembling Hand]

My 2 bobs worth:

If you just want to do indexes, futures are the way to go, hands down. Options will cost too much in the spread.

CFDs might be a good way to practice if you can get a smaller contract size, but otherwise agree with your avoidance of these for index trading.

Generally you need to deposit $5k to open a futures account, but presuming you will be trading the SPI, I would suggest you need about 20k per contract traded to be adequately capitalized. You could start with less of course and many do, but not what is recommended.

Agree wayneL

I have said before IMO Futures are the only way to day trade the Indexes. people worry about the $25 dollar per tick of the SPI and I understand that but the smaller size of the CFDs per tick mask the fact that you always have to get over the large spread to get into profit and it adds to the pain on a loss. I day trade the SPI and mostly have a 4 tick stop something that you simply can not do with MM CFDs. That free brokerage is bull ****. Its a big cost to get over that spread. With a 2 or 3 point spread your stop is going to be 6 or 7 points minimum. This will have you looking for Profits out to 9 or more points which after you get over the spread means you need a 11 to 12 tick move. All very possible yes but it is easier on the SPI no matter what your target is.

My recommendation is get a Live Sim to practise on. Develop a couple of trades that work well and trade the SPI. If you have to start with CFDs use it as a practise. But its really not a day traders instrument.

 

[chops_a_must]

Agree wayneL

I have said before IMO Futures are the only way to day trade the Indexes. people worry about the $25 dollar per tick of the SPI and I understand that but the smaller size of the CFDs per tick mask the fact that you always have to get over the large spread to get into profit and it adds to the pain on a loss. I day trade the SPI and mostly have a 4 tick stop something that you simply can not do with MM CFDs. That free brokerage is bull ****. Its a big cost to get over that spread. With a 2 or 3 point spread your stop is going to be 6 or 7 points minimum. This will have you looking for Profits out to 9 or more points which after you get over the spread means you need a 11 to 12 tick move. All very possible yes but it is easier on the SPI no matter what your target is.

My recommendation is get a Live Sim to practise on. Develop a couple of trades that work well and trade the SPI. If you have to start with CFDs use it as a practise. But its really not a day traders instrument.

Yah... I think I have a few trades with high probability outcomes to work off.

But for now I'm wondering where I can get SPI historical data from... and how much it costs. At this stage just looking at it for getting some statistical data, and eventually perhaps for system design/ backtesting.

Cheers,
Chops.

 

[julius]

Hi Chops,

I'v also been looking at day trading the indexes, after trading a couple of the swings in the last few months with my long term positions.

Very interested to hear your experiences over the next few months - keep us posted!

 

[aramz]

Yah... I think I have a few trades with high probability outcomes to work off.

But for now I'm wondering where I can get SPI historical data from... and how much it costs. At this stage just looking at it for getting some statistical data, and eventually perhaps for system design/ backtesting.

Cheers,
Chops.

Just trawling through some day trading threads and came across this. Any updates on your SPI futures trading Chops?

Wow this thread was almost 10 yrs ago.