Chartist: Another gap question

[#1]

As our resident gap expert, would you say it's possible to trade gaps on the TOPI using wave warrants? The idea being to make small profits of around 3 - 4k per day using about 40K as capital. Or do the spreads make it too risky? I've been watching from the sidelines for a while and it looks viable, but your opinion would be appreciated. Thanks.

[#2]

in answering this question you have to ask yourself...why would you want to make what is a very hard thing to do even harder. Trading is not difficult it is hard....day trading requires that you have the best tools available, that you trade liquid instruments and markets which work all the time. The top 40 can move 100 pts in a matter of minutes (seconds even) and therefore you cannot I repeat cannot trade successfully intrady using warrants. The warrant makers disappear at the most (in)convenient times and they are never ever held accountable. In addition to that you will be using a platform (I assume you will be using SFM) which UNBELIEVABLY doest provide a price (not even delayed) on the underlying. No one seems to be able to provide an answer as to why not? Most people I have interacted with regarding this topic don't even know that waves are priced on the futures market prices. So I will state here categorically that it is not possible over time successfully and consistently trade intra day using warrants.

[dimitrius]

I can't believe I'm about to say this... But Chartist is right. Stay away from waves. It's a one sided, win-lose affair the longer you continue to trade them. You'll be on the losing side. There's no accountability on the market makers side. They leave the market as soon as they see it's not in their favour.

[john_1]

I agree with chartist, but what I think happens is... some bloke phones to trade, so they suspend the system so they can trade 1 bloke out without taking on any risk while the market is moving. The net effect is everybody else can not trade. They dont care as they are fully hedged. Point is when the ***** hits the fan the door is only big enough for one oerson...do you think that one will be you.

[CrownA]

Calling Simon - How about it - let us get the TOP40 Future on SFM. All your hype about Currency futures, let's get one we can trade. Also I don't understand why the issuers are using the Future, when the warrant is based on the TOP40. why not have a spread around the TOP40 value???

[SimonPB]

because the top40 is an index and not a tradable real thing. ALSI futures (which is the top40 futures contract), lets see.

dimitrius. Nope I ahev traded waves on my system for 3 years (and traded them for the 3 years before that) and done very very well. Understand the product and trade accordingly.

[#7]

Interesting Simon, I would never have pegged you for a wave trader. Out of interest, do you generally trade intraday on your system, or hold for longer periods where you expect longer-term trends?

[#8]

Simon agreed, If you going to keep a long position why not just keep it in a wave, been working for me OMO

[SimonPB]

wardog, no not intraday (warrants/waves will not work intraday, me thinks). Average hold for my index waves is around 3-4 weeks (longest is 11 weeks, shortest is 20 minutes).