The transition to Futures trading

[MichaelD]

TH,

The biggest issue preventing me from moving to futures ASAP is the minimum SPI contract size of 1. My risk management requires the ability to (occasionally) deal in a contract size of 0.2 which as far as I am aware cannot be done on the SPI (but can be done with CFDs).

Once I have successfully scaled a further x5 I can then move safely to the SPI.

 

[pavilion103]

Quite the contrary, i know guys that are making over $100,000 per month...their trading accounts are in the millions, former prop traders.

I reckon, my best guess...is TH here is pocketing 15-30k for a stellar day. I could be a little low here. He's likely got a 10k daily stop.

So i don't think you're wrong about the potential Pav.

I'm glad to hear that.
I like to come on here and get excited about trading and the potential.
The more that things begin to click the more excited that I get.
Obviously with the right risk management, mindset, knowledge, hard work etc. it's possible.

The potential is staggering and exciting.
I'm committed to doing whatever it takes to realise this potential.

This is the only outlet I have to share my enthusiasm haha
If I tell anyone else they will simply think I'm either delusional or an arrogant douche

 

[Trembling Hand]

I reckon, my best guess...is TH here is pocketing 15-30k for a stellar day. I could be a little low here. He's likely got a 10k daily stop.

TH,

The biggest issue preventing me from moving to futures ASAP is the minimum SPI contract size of 1. My risk management requires the ability to (occasionally) deal in a contract size of 0.2 which as far as I am aware cannot be done on the SPI (but can be done with CFDs).

Once I have successfully scaled a further x5 I can then move safely to the SPI.

Yep gotcha. Luckily you are trading the ASX200, The other CFDs are just ridic as far as spread cost vs futs.

 

[pavilion103]

LMAO @ the video

 

[MichaelD]

At the risk of getting way off topic here (sorry Pav), a significant business risk seems to be being kicked out by whichever bucket shop, err CFD provider, you are trading with if you are too successful. I haven't been able to dredge up any relevant posts via Search, so would be grateful for any comments on this.

 

[Trembling Hand]

At the risk of getting way off topic here (sorry Pav), a significant business risk seems to be being kicked out by whichever bucket shop, err CFD provider, you are trading with if you are too successful. I haven't been able to dredge up any relevant posts via Search, so would be grateful for any comments on this.

Just watch for slow entries and slow exits especially when its moving against you. You should also have real data rather than the crap they give you.

 

[CanOz]

At the risk of getting way off topic here (sorry Pav), a significant business risk seems to be being kicked out by whichever bucket shop, err CFD provider, you are trading with if you are too successful. I haven't been able to dredge up any relevant posts via Search, so would be grateful for any comments on this.

Read this through, will see if i can dig up some more later....

Nothing to something scalping system

 

[CanOz]

Here is where they closed him down...

 

[skc]

Many will think that I suffer from delusions of grandeur but I see no reason why in the near future profit of $100,000 can be made (50 points per week x 2 contracts).

Quite the contrary, i know guys that are making over $100,000 per month...their trading accounts are in the millions, former prop traders.

Pav, dream bigger! Go to 2 contract as soon as you can, then ask TH to give your name to the Prop shop. And you will really experience what sizing up means!

I reckon, my best guess...is TH here is pocketing 15-30k for a stellar day. I could be a little low here. He's likely got a 10k daily stop.

You are under-estimating would be my estimate

TH,

The biggest issue preventing me from moving to futures ASAP is the minimum SPI contract size of 1. My risk management requires the ability to (occasionally) deal in a contract size of 0.2 which as far as I am aware cannot be done on the SPI (but can be done with CFDs).

Once I have successfully scaled a further x5 I can then move safely to the SPI.

I thought you mentioned about getting into liquidity issues with IG? Can you disclose at what $/tick level you are getting these issues? If you are not yet doing a few SPI then I am a bit surprised that you are having issues already. Although I must admit it's been a long time since I last traded with IG.

At the risk of getting way off topic here (sorry Pav), a significant business risk seems to be being kicked out by whichever bucket shop, err CFD provider, you are trading with if you are too successful. I haven't been able to dredge up any relevant posts via Search, so would be grateful for any comments on this.

If you are consistently profitable the bucket shop won't necessarily kick you out. They should be smart enough to know you are profitable and simply hedge your trades... like as if you are doing DMA but only with futures... instead of taking up the other side of your trade.

They kick you out only when you are bending their rules or finding a glitch. Here's another story from years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=14588&highlight=result

 

[MichaelD]

Just watch for slow entries and slow exits especially when its moving against you. You should also have real data rather than the crap they give you.

Used to get that on occasion with larger position sizes and have now figured ways around it.

It's very rare now that I get the dreaded "Your order is being handled by the dealing desk" message.

I thought you mentioned about getting into liquidity issues with IG? Can you disclose at what $/tick level you are getting these issues? If you are not yet doing a few SPI then I am a bit surprised that you are having issues already. Although I must admit it's been a long time since I last traded with IG.

I trade sizes between 0.2 and 10 contracts (ie $5 to $250 per tick). It's at the 10 contract size that issues crop up at times.

They kick you out only when you are bending their rules or finding a glitch. Here's another story from years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=14588&highlight=result

Thanks - will read this one carefully.

 

[TheUnknown]

No Therein lies some poor thinking and also I suspect some lack of knowledge of how markets trade. Err 2000 trades at a very conservative estimate of 0.5 point tax for crossing the spread twice every trade. ( I bet its way way more)



0.5 point/5120 asx200 = 0.00097 per trade X by 2000 trades = 0.195312 If you trade value is $100,000 you would need $20,000 in your CFD account and the other $80,000 in your 'high interest' account.

How are you going to make up paying another 20 grand extra cost from $80 grand in a savings account?

You would have to be crazy to trade CFDs for anything other than a hobby.

Curious to know why you think those that trade cfds are crazy? Recently i have meet someone that makes quiet a huge lot of money trading cfds/fx. Some months he loses huge money but overall in positive big time. Jan has earned him $82k trades US cfds/fx.

 

[beachlife]

Or here is another way to look at it.

Assuming $100,000 position size. That is $19.53 per point ($100,000/ASX200 5120 = 19.53 per point)

Doing 2000 trades that is an extra cost of 20 grand ( 19.53 per point / 0.5 point CFD 'trade tax' = $9.765 * 2000 trades = 20 g)

Here is a screen shot I just took from my cfd provider. The top one follows the spi, the other is their own composite index.



If I was to buy 25 cfds at market my commission would be $0, and the spread is 1 point.

How much does it cost round trip to trade 1 spi fut?

 

[CanOz]

Here is a screen shot I just took from my cfd provider. The top one follows the spi, the other is their own composite index.

View attachment 56582

If I was to buy 25 cfds at market my commission would be $0, and the spread is 1 point.

How much does it cost round trip to trade 1 spi fut?

10 AUD on Interactive Brokers...

 

[tech/a]

Here is a screen shot I just took from my cfd provider. The top one follows the spi, the other is their own composite index.

View attachment 56582

If I was to buy 25 cfds at market my commission would be $0, and the spread is 1 point.

How much does it cost round trip to trade 1 spi fut?

$6 from IB
FTSE $2
DAX $1.70

From memory I think!

 

[CanOz]

$6 from IB
FTSE $2
DAX $1.70

From memory I think!

Round trip?

 

[pavilion103]

I reckon FTSE is 1.70
3.40 round trip

 

[beachlife]

Ok so I can trade to a limit of 500 SPI cfd's, equiv to 20 futures contracts.

So to trade 500 cfds costs nothing per trade, 20 futs contracts costs $200.

 

[beachlife]

I reckon FTSE is 1.70
3.40 round trip

The spread on the UK100 cfd is 6 points now, Germany 30 also 6. Will see what they are later when Europe wakes up.

 

[skyQuake]

Ok so I can trade to a limit of 500 SPI cfd's, equiv to 20 futures contracts.

So to trade 500 cfds costs nothing per trade, 20 futs contracts costs $200.

That 1pt spread is $500

 

[cynic]

The spread on the UK100 cfd is 6 points now, Germany 30 also 6. Will see what they are later when Europe wakes up.

Yes those are the outside hours spreads for the March futures. The spreads on both Germany 30 and UK 100 normally reduce to 4 points inside hours.