It has become quite apparent to me that the real money is made before the market opens and when it has closed. it makes sence as it is the only time the futures players have the market all to them selves.
not necessarily... I've often seen the futures sell off hard or ramp up after the close, only to close the gap with cash again in the morning. Also, if there is a big change in sentiment overnight the futures gap up or down in the morning. Just cos they open 30 minutes earlier doesn't mean you can get in at a better price. Do you have live futures prices? They can be all over the place during the day. The real advantage I see to the ALSI futures is the liquidity, gearing and super-low trading costs. Other than that they are just like any other instrument. But I guess they are way better than index warrants or waves which are based off ALSI, but have all sorts of problems of their own
John, Tango is right, Risk = Reward. Futures are liquid, costs are low, but the only way you can take advantage there is to take an overnight position which in itself can eat you alive if you're wrong and the market gaps against you. Better to trade after open and before close. In addition be VERY careful which broker you go with. I had a very bad experience with a Jo'burg broker who simply locked out my acc because I was 'not trading often enough' and they 'reserve' bandwidth for high volume traders. So make sure you ask the right questions about guaranteed access before you sign up! I lost a packet because I didn't have access to my acc.
I have experience with stocks, instalments, warrants and waves, but not with futures - so I'll appreciate some education here (I read the online futures course)... Will you recommend Cortex as broker? How do their trading costs compare with STDbank? I think STDbank adds some extra margin to their futures contracts, does this suit you? I think one wisdom from the book "Reminiscence of a stock operator" is to never meet a margin call - do you agree with this? Any specific tips on futures trading?
SFM only allows futures on stocks, so this is a slightly different topic than the title suggests. The extra margin is not a factor for me. What is important is the spread and the cost. SFM adds 0.4% each side of the spread + brokerage cost. This implies that one is down 1% of the underlying when entering the trade. And I agree that one should never come close to a margin call. Bad risk management.
mammon, have a look at dwt.co.za as an option. They're focussed on smaller daytime traders. shop around and make sure you get good service. If you're a big time trader, then Cortex is fine. On futures, it's a whole different ball game. Your best approach is to make sure you have real time trading platforms and charts. Each futures trader has his own combo of indicators. At a minimum if you're going to trade ALSI futures, you need to watch realtime FTSE and TOP. It's no guarantee but our market tends to mimic the FTSE. The DAX also correlates pretty well. FTSE and DAX tend to lead us a bit. I also keep an eye on ASX, DOW, Forex movement and commodities as the ZARUSD relative to our market value is also a leading indicator of movement (people forget that a chunk of the money on the JSE is foreign and they measure value in their own currency). Also, nothing like sentiment to move futures: When oil suddenly spikes up and XAU goes up, then you can expect volatility. Lastly, the macro economic indicators of the FOMC, BOE and ECB usually have definite movement potential on futures and if you do your research well then you can position well with a bit of luck. The one thing that I can honestly say futures is NOT is a happy trigger finger. For futures you MUST have a strategy and stick to it. If you guess futures, you're going to lose
well said. I tried to open an account with Cortex, but they wanted a commitment of 20 contracts per day or something stupid. As far as I can tell they had big bandwidth problems and were trying to squeeze the smaller guys out. I've heard nothing but good reports about DWT. Another option is to use a CFD platform. The trading costs and spread are not as good as DWT, but if you are looking at trading swings over a few days it's fine, and they also offer CFDs on just about anything in any market around the world. I've moved all my geared trading to IdealCFDs and been very happy. SFM - I know it's a bit rude to talk about competitors on your board, but there is clearly a market for better realtime data and other instruments beyond SSF and warrants.
Hi Tango, I also trade the ALSI with idealcfds.co.za and to me the cost / spread is not such a big issue. You can either trade the futures contract or you can trade the spot. If someone is interested in how the cost work or wants more info please contact me plomp13 at hotmail dot com and I will provide an explanation. Regards Bartho.
you should never trade the cash/spot with IdealCFDs or IGIndex... it's not the real cash prices. The spread they give you actually tracks the futures, but you get a fixed 30pt spread (or 45pts for guaranteed stops). Just trade the futures prices and your spread drops to around 23pts on average and sometimes as low as around 16pts.