Short term trading on ASX – is it viable?

[DeanWalton]

I have completed my weekly and monthly rotational systems and wanted to do a short term system/mean reversion as i have never done one of those. I have just read Larry Connors “Short term Strategies that work” and was thinking Double 7’s or 2 period RSI. I am also interested in Dr Elder’s Impulse system.

Given the ASX market is not as liquid as US and trades cost $9.50 a pop – is anybody doing any short term – low multi day trading? Is it worth pursuing on ASX? I do not have US data and was not thinking about trading in US just yet until i get a bit more experience in Aus market.
Would appreciate any experiences?
Thnaks Dean

[GlenPeake]

Hi Dean,

The ‘general’ consensus with Short Term MOC/MR trading on the ASX is increased commissions, slippage, (getting) fills and lack of liquidity make it challenging for a viable positive outcome…..

I know Trent is having success so it can be done.

…But knowing that others have tried and have walked away from trading short-term systems on the ASX because they were just making their broker rich can save you a few $$$ upfront.

[JulianCohen]

I agree, as I am one of the walk aways.

However, as a suggestion, you can certainly build a system that backtests well on the ASX, so if you don’t want to get the US data yet, then work on your system in ASX and then see if you can transfer not to US once you have built one that you are happy with.

[DeanWalton]

Do you know how Trent does it if he is successful? I would be thinking of holding for 5-10 days perhaps so not 1 day type systems. Not sure if that makes any difference.

[DeanWalton]

Having that discussion with myself now Julian.

[JulianCohen]

The issue isn’t holding the stocks, it is buying them in the first place. That is the area that causes the issues, getting fills at near lows of the day is very difficult.

[Nick Radge]

I concur with Julian.

Build the system around the ASX, trade it and assess, then if no working out transition the system to the US.

That way you wouldn’t need to buy US data without a solid reason.

[TrentRothall]

Hi Dean

Sorry about the slow reply!

I have been trading a multiday day MR on the asx for a few years now, but like has been mentioned here i have in the last 12 months been transitioning into other strats and into the US. Mainly because of missed trades, I think I have been able to make it work because I am not trading large accounts like some people here. You will pay a lot more in comms too as you know, but in my view comms are known during testing and are factored in so that shouldn’t be a killer.. During testing too i factor a 50% chance of missing a trade in the low of the day is equal to the limit order, in reality it isn’t that bad but that is when the issue seems to occur.

I am also not compounding my account on the ASX i am transferring any profit into my US shortterm system which (hopefully) is more scalable, time will tell with this.

[DeanWalton]

Finally found the post – thanks Trent. All understood. I’ve never traded a MR system before so i am focussing on getting the Superfund systems right and then i will come back to MR. Still need to get comfortable with the thought of buying in dips and buying lower – not something i have ever done before.

[TrentRothall]

No problem Dean, feel free to reach out when you start looking into it more.

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