DJIA futures swing trading

[Square]

Sir, I have traded DJIA and FTSE100 both. I have often found liquidity issues with DJIA but that for you should not be an issue if you are carrying overnight positions. Spreads can go as wide as 20-30 Rs.

If you have figured out everything and have the finesse to trade gaps, I wish you all the luck in your endeavor. Please do keep us posted of your progress.

Hi, the intraday movement will be miniscule, the only movement you will have is when the respective markets operate. Rest for NSE trading it will be more or less static price for such indices. So I wonder why would you trade DJIA, FTSE100 or S&P500 for intraday on NSE. So in my scheme of things it will include gap, if any as well as intraday movements post gaps, if any.

 

[Square]

Many indices are traded on other exchanges like SGX Nifty etc
What you have to understand that it also has implied risks.

A simple example, our "media" looks at SGX Nifty and the tries to predict opening but they miss by a mile many a times.
Long story short, there's no advantage of what you think that you'll do in time difference thinking "as if you traded in hindsight".

Bcos before an event, those markets also start preparing, buy/sell options etc, how would you hedge your positions?

There is a 50% chance, and that's why its the way it is. Else everyone would be doing that.
Effectively, like BPR said, you want to "trade gaps"?

My friend, we track SGX Nifty and predict our open. That is what we do. Have you seen SGX Nifty swing intraday like our Nifty intraday range. No.

What do you think, would the US market look at DJIA futures or S&P500 futures traded on NSE and then decide at what level should they open. No. If you have been tracking DJIA or S&P500 futures traded on NSE they simply trade around the closing price of the respective underlying in the US market.

 

[NoviceStockTrader]

Hi, the intraday movement will be miniscule, the only movement you will have is when the respective markets operate. Rest for NSE trading it will be more or less static price for such indices. So I wonder why would you trade DJIA, FTSE100 or S&P500 for intraday on NSE. So in my scheme of things it will include gap, if any as well as intraday movements post gaps, if any.

I never said I have traded DJIA intraday. I used to take positions like you but I stopped eventually because I couldn't suitably hedge my positions.. Moreover I figured why trade an ill-liquid instrument when there are hundreds of other choices in our market.

 

[Square]

I never said I have traded DJIA intraday. I used to take positions like you but I stopped eventually because I couldn't suitably hedge my positions.. Moreover I figured why trade an ill-liquid instrument when there are hundreds of other choices in our market.

Sorry to jump to this conclusion. Since you have traded DJIA futures on NSE, could you please throw light on your decision to trade this instrument. i.e. why you choose to trade DJIA and FTSE100. I would be very keen to learn if your thinking was different than mine.

While you eventually stopped it is a different matter, but why you started is what I am all ears. It can help and add to my thinking on this subject.

 

[NoviceStockTrader]

Sorry to jump to this conclusion. Since you have traded DJIA futures on NSE, could you please throw light on your decision to trade this instrument. i.e. why you choose to trade DJIA and FTSE100. I would be very keen to learn if your thinking was different than mine.

While you eventually stopped it is a different matter, but why you started is what I am all ears. It can help and add to my thinking on this subject.

Sir, I started because I had a lot of money which had to be employed. So I was buying everything that was going up. I wasn't much into short trades. Since there was a very strong trend in the US markets, it was an obvious choice for me.
Even I had the same kind of thinking as you had. I had a job and couldnt find much time tracking markets.

The question is how good is one at identifying trends. That can be tricky at times as you can give away all profits you have made. If you can identify trends, you can trade any market of your choice. So why trade DJIA?
At the moment the US markets are in a strong uptrend so everything seems rosy. Once they turn choppy it becomes stressful to get in and out of trades specially on nse where liquidity is low. The spreads get far wide, as much as 50-70 rs which eats away your profits. Point is why give away 50 points to lack of liquidity?

If you are not already taking positions, I suggest you take some. You will realize that you will be curious to follow US markets at night when you should be spending time with family or with your own self. If the markets moves against your position in the night, you wont sleep well because you don't have a hedge. There are many psychological factors involved here.

If you have a good case to handle all these issues, then you must try it out. For me, I like to sleep without any tension sir :thumb:

 

[NoviceStockTrader]

I do carry many over night positions in our markets. But I have greater flexibility to hedge them.

 

[travi]

My friend, we track SGX Nifty and predict our open. That is what we do. Have you seen SGX Nifty swing intraday like our Nifty intraday range. No.

What do you think, would the US market look at DJIA futures or S&P500 futures traded on NSE and then decide at what level should they open. No. If you have been tracking DJIA or S&P500 futures traded on NSE they simply trade around the closing price of the respective underlying in the US market.

Just want to know how you plan to hedge your positions?

 

[Square]

Sir, I started because I had a lot of money which had to be employed. So I was buying everything that was going up. I wasn't much into short trades. Since there was a very strong trend in the US markets, it was an obvious choice for me.
Even I had the same kind of thinking as you had. I had a job and couldnt find much time tracking markets.

The question is how good is one at identifying trends. That can be tricky at times as you can give away all profits you have made. If you can identify trends, you can trade any market of your choice. So why trade DJIA?
At the moment the US markets are in a strong uptrend so everything seems rosy. Once they turn choppy it becomes stressful to get in and out of trades specially on nse where liquidity is low. The spreads get far wide, as much as 50-70 rs which eats away your profits. Point is why give away 50 points to lack of liquidity?

If you are not already taking positions, I suggest you take some. You will realize that you will be curious to follow US markets at night when you should be spending time with family or with your own self. If the markets moves against your position in the night, you wont sleep well because you don't have a hedge. There are many psychological factors involved here.

If you have a good case to handle all these issues, then you must try it out. For me, I like to sleep without any tension sir :thumb:

The very basic premise of my entire trading strategy is EOD based / daily time frame trading. While the same can be done with Nifty too, but the problem is since we sit in the same market, we are exposed to noise, news, views etc all around. Also during the market hours you are tempted to see your position and track it, even though you might have decided on daily time frame basis. e.g. there is a gap down in Nifty for 50 points and you get bearish for the day, only some time to see that Nifty closed up that day. So the gaps, intraday volatility etc can change you view of daily time frame decision. Hence if I get to trade is some instrument which cannot be tracked on intraday basis neither can be acted on intraday basis should help overcome the problems stated above. So there is no case of seeing the US markets at night, since in any case you cannot do anything till our markets open.

Also the spread is around 5-6 rupees through out the day, I am tracking DJIA futures and S&P500 futures for around a month. For S&P500 it is 2-3 rupees.

 

[Square]

I do carry many over night positions in our markets. But I have greater flexibility to hedge them.

Just want to know how you plan to hedge your positions?

If by hedge you are talking about stop loss then in DJIA, S&P500 or FTSE100 trading on NSE the stop losses will have to be set on the basis of closing price chart on daily time frame. So the stop loss will be quite large compared to intraday trading. Though initially I plan to allocate 1 Lac for 1 lot of DJIA futures, I will eventually raise it and allocate 2 Lac for 1 lot in a months time.

If by hedge you mean taking opposite positions, then hedging is a myth, unless you are trading options to manage risk of your position. If you are just trading futures, you can just reduce your position to the extent you are comfortable of taking overnight position on the basis of daily time frame chart.

 

[NoviceStockTrader]

Sir, Please keep posting your trades here and the logic behind it so other members can benefit from it. I wish you all the best.