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quinn123

Day-trading ASX

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Hi,

 

I'm going to be daytrading ASX listed equities this summer (in Australia). I have been active on this forum for a good year now, although not posting very much but just reading.

 

I have read the whole wyckoff forum plus DBpheonix E-book, the day traders forum etc. and have found this the best source for information in regard to trading by pure price action.

 

I'm at the stage now where I have some setups that I have defined such as; rectangle bases, hinges, trend continuations, false breakouts etc. Are there any setups that you regard as your goto setups in certain markets? PM me if you like.

 

One thing I'm a little worried about is alot of my setups are based on support/resistance, price action and trendlines. I'm worried that support and resistance trading could be dead? I know a lot about how the market functions, and why support and resistance occur (increase of trading activity around important "price" areas - areas significant to traders currently in a trade or looking to get into a trade). One of my worries stems from the fact that usually on the other side of S/R there is usually a lot of stops, and it is not difficult for a bigger fish to push price past these important levels to gun for stops. I have even manipulated speccies by spiking past areas of important resistance to force a fake breakout then unload.

 

I'm thinking now what is really important is whats in the price action (the background), what are the other people in the trade thinking, what will they do at this S/R level etc. I see this as almost being discretionary, but also having some basic setups that will hopefully increase the probability of success. I surpose what I'm talking about is judgement gained from experience.

 

I would appriciate it if some of the pro traders could comment and put some of my fears to rest.

 

Cheers,

 

Quinn

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sounds like you are on the right track. (except I think day trading ASX stocks is tough. Swing trading easier) :2c:

I will tell you a story that should allay some fears about support and resistance and what the market is thinking (the point being nothing changes that much from my perspective) -

MIM - ASX - mount Isa mining. for those old hands that remember that, it got taken over by Xstrata, and management did not object - RIGHT BEFORE THE BIGGEST MINING BOOM WE HAVE SEEN!. It was a gunna be stock. Management always said next year its gunna be better, etc; etc; etc. It was highly traded, highly liquid.

Any way - at some stage in the mid 1990s there was a massive at the time OTC option position of about 49,000 options at a particular strike (49mil shares equivalent when it maybe traded 2-3mil a day). It was common knowledge, there was also a lot of ETOs around'the same levels. The first time it dropped to the "support "levels it bounced. Myself and a bunch of traders bought and made money. the second time everybody looked to so the same again. So there it was we all bought, all thinking this is easy money, big support, the market knew it etc; etc. Then one day, a few of us were discussing it, and some one said, "shouldn't it have bounced from here". This set off alarm bells with me thinking ÿes it should have but it didn't. I and a few others immediately dumped our longs, and a few guys went short.

well support quickly broke.

There was no one else left to buy the stock - we had all bought the first support, and thought it was a magical line. This was also backed up by fundamental information. etc;.

 

Point being - I think you are on the right track. Understand support and resistance, understand how it fits in with your ideas of how the market works and the players (rightly or wrongly its all theory) and then think about whats happening AT THE TIME. things change. Even those at the coal face, creating the support sometimes believe their hype, and its only when you stop and combine the analysis that it makes sense.

This was not about stops, about gunning for them, this was pure supply and demand, when there basically became no more demand.

 

(Dont know if this helps but it was topical as I was discussing the MIM story with another guy last week)

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Hi quinn123 i agree with SIUYA it is a bit difficult to day trade ASX stock,big ones open up with a gap and after that can spend whole day trading in a very narrow range.I day trade SPI on ASX-200 thare are plenty of action during the day and i found a lot of set-up workihg very well and this contract(APZ0) trades almost 24 houres.Good luck.Youri.

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I trade HSI instead (shorter hours and lots of movement). I did trade SPI when HSI went nuts for a year but never bothered with the stocks.

 

But lets be real - support and resistance trading will never die it will just morph from time to time and the traders job is to watch and ride those changes. Look up Sam Seiden on the net - you'll find a lot of stuff with a slightly different spin on S&R, Supply and Demand which might add to your efficacy.

 

If you're daytrading ASX stocks then the #Tradit room on Othernet of IRC is a group of people doing that. The tend to trade channels and pitchforks but there are a variety of preferences. Seem to mix day and swing trading.

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SIUYA,

 

Thats funny that you mention MIM because I'm a geo and work around the Mt-Isa Cloncurry region, close to the ground Xstrata took over from MIM. I get what you are saying, and it helps putting it in context like that; good story either way..

 

YOURI,

 

I agree that trading ASX stocks may be tuff, and I think it might be best to take your advise because why make a tuff job even tuffer. Do you only trade the SPI at the moment? Will you sit there any only trade one instrament the whole day? Also what broker and platform do you use for this?

 

KIWI,

 

thanks for the advise and links. Are there any other IRC channels worth being active on? Is it really worth being active on an IRC channel at all?

 

Cheers for the replies

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Interactive Brokers via TWS Universal Account (includes Aussie Stocks and Fx)

 

Sierra Chart for charting, programmable customization, and order entry/management.

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Hi quinn123.I also trade a little bit of stocks mainly top 20 on weekly charts,stay in a posision for 3-6 month andYM,NQ-futures but becouse of time differens -60 min.charts.For YM and NQ i use Tradestation for SPI MFG and E-signal.I try not to sit a whole day in front of a screen,i use 4-houres chart to find an entry point .But when i am in a trade or looking for an entry i am not far from a screen.As soon i enter a trade i put a stop and start pray not to be stoped out(ha-ha).As soon as market moves in youre favore put stop on breakeven and can relax a bit but after your have to watch target.I assume if it call daytrading u have spend time in front of a PC.Good luck .Youri

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Kiwi - I took some of your earlier advice elsewhere and loaded up sierra chart.

Loving it!! Hooked up to some FX data and IB and currently testing a semi automated FX system. So thanks for that advice.

 

To be honest I have not tried ASX data and IB into SC yet as I am working on the FX side so far which seems fine, and my daily stock data comes from Esignal fed back into IB.

(The only difference is that FX will be range bar and hourly traded, whilst IB will be daily swing traded.)

 

When it comes to ASX stock data, do you use IB and SC together as well, or is the daily data from IB not great for stocks (especially with splits, bonus issues, dividends etc)

(slightly off topic but also topical for ASX day trading thread)

thanks.

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I use IB with Tradestation (and OwnData) to swing trade options on ASX and pay the monthly data fee (about $40USD per month). So definitely doable and IB does have great rates (AUD$3 per contract on options is awesome.)

 

As for daytrading ASX, well I leave that to the pros :)

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thanks fugu-master.

I currently use IB for stocks - its fine, except that you cannot give up trades to them (its possible but they dont want to unless you have a lot of money with them), and they also have not introduced shorting yet. (CFDs yes - but these are crap IMHO).

The shorting ability is coming in the new year according to sources. Currently I am investigating other alternatives as well.

 

 

My real question was regards the IB data for stocks in a similar fashion of joining it with other data and using it in SC..... but as you use tradestation and open source data - I guess the answer is nope. Thanks anyway.

 

(wish list for Christmas - a broker that offers all of the below - leverage, access to multiple markets and instruments, good FX, good charting, auto trading abilities, accurate data, give up facilities, reliable and plentiful stock shorting capabilities, accurate accounts, segregated accounts, competitive fees and rates.) Many are almost there, but not quite.

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Hi, good replies very informative. I was wondering what do you regard as the best intrument for your daytrading during Australian (ASX) hours (or near to)? It might be a stupid question but what intrument is the easiest to make money in? For e.g. Australian stocks are fairly difficult because of the narrow spread during the day as previously mentioned in this thread.

 

Do you prefer:

- forex; If forex which currency?

- futures; If futures which indexes?

- commodities; If commodities which commodity?

- stocks; If stocks which type of stocks? Pennies or Bluechips etc?

 

Cheers,

 

Quinn

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Hi quinn123.There are no such instruments easiest to trade.Every instrument has own personality so do you and thay have to match .Also it depends on youre funds,time you can spend.You have to do a home work, what fits youre personality best.Good luck.Youri

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Thanks Youri, I understand what your saying.

 

I havn't had any experience with futures or forex, only stocks. I think I want to give futures a go; maybe the HSI or STI.

 

Thanks,

 

Quinn

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