Large caps are not really the best for day trading. Too sluggish. But be it large, medium, or small,as long as the stock is active and with sufficient volume, it qualifies. Rather than picking from a list of stocks such as the Nikkei 225, traders usually select active stocks and create a watchlist that they follow and then trade stocks from the list once the stock works into the trader's setup. If you want to do it that way, you might be better off using Kabu.com's KabuStation rather thanSBI. You can open an account online in one day and then apply for the margin account you wanted the next day. But say on the application that you have over 1 year of experience trading on margin. However I don't know if they'll approve it as you are a student.
Sorry to throw cold water on your observation regarding bid/ask sizes, but that can happen as often as not. I don't think you will find pro-traders who try to make heads or tails of the bids/asks. A trader at Musashi Shoken just got nailed for padding the bids http://www.asahi.com/articles/ASG6D643LG6DUTIL048.html
Hello, In addition, I want to give day trading large cap stocks a try so I don't have to wait for the right set ups on futures all day. Should I just isolate stocks to high volume Nikkei 225 components using this Bloomberg page? http://www.bloomberg.com/markets/stocks/movers/nikkei-225/ I have set some criteria for me to find stocks to watch during the day. 1) N225 component 2) share price between 500-1000 yen 3) trades over 5 million shares a day. Do the criteria look fine to you? Many thanks
I have been waiting for TradeStation to be available on Monex for quite some time. It would be nice if they can do it soon. Also, I have observed that on that larger than usual limit orders for mini contracts tend to attract price to go there. For example, if the size of limit orders are around 800 at most price levels and then there are limit order above or below current price that has a size of 1600. Is it just random or does large orders tend to attract price? If it does attract price, what is causing that to happen?
Unless you know something that I don't, comparing the volume of the two contracts should prove fruitless. Also, you must be careful with SBI's data. They get their data from Reuters, and Reuters does not flag rollover data. So the rollover data is mixed in with actual trades. When analyzing price movement you should use the contract you're trading. But you can keep an eye on the large contract to see if it follows, as the mini has many false breakouts. However , once you are able to differentiate between false and valid breakouts, that should no longer be necessary. In a previous post I forgot to mention Rakuten's Market Speed. It's one of the more popular platforms. Also, keep an eye on Monex. They will be providing TradeStation in the near future.
Today the volume of mini contract was less than 1/2 of the large contract. Does this usually happen before expiration date? Also, I have another question regarding consolidation ranges. Suppose I am looking to trade a breakout of a range, should I use the trading range of large contract or mini contract to define a range? Thanks
For trading blocks, arbitrage, and some strategy trading, the large contract can be preferable. Some prefer to place market orders in the large contract in times of wide fluctuation. And, of course, there are times when the large contract offers a better price for the small trader.
I see. My goal is to eventually grow my account large enough so I can trade the large contract and applying proper risk management. Recently, the large contract market has been doing more volume than the mini contract market. I am really curious as to why investors/traders choose to trade in the large market over the mini market since mini may be able to offer better entry. Say a retail trader has enough capital to trade 10 mini contracts, should he/she trade 1 large contract instead?
If you have been, and still are, successful with futures, fine. It's just that the graveyards are full of those who started out trading futures without years of experience in stocks, where with less risk one can learn to trade and develop a trading plan. Given the large number of stocks that are suitable for trading, there are constant and varied opportunities to quickly gain experience. You must be taking night classes at Sophia as you're day trading. Most brokers require at least 1 year of experience before they approve a margin account. If you have 500,000 yen, you're using around 10% for margin, which is fine. But just because you can afford to trade more contracts, isn't a reason to do so. You should stick with 1 contract until you are consistently profitable. Then compound your profits until you can buy 2 contracts. Then 3 etc. But don't forget to withdraw some profits for a rainy day rather than adding contracts.
Hello, Thanks for your information. Can you elaborate more on the reasons why you think starting out with shares trading is better than futures trading? Two main reasons why I am trading futures but equities are 1) I was denied a margin account by my broker when I first started 2) I don't know how to pick stocks for day-trading. Just a side question. Can you shed some light on money management for day-trading mini nikkei contracts? Right now what I do is for every 500k yen I have, I trade 1 mini contract. Sometimes I feel I could be a bit more aggressive. Would you say that is about right?
