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Soultrader

Intro to Mini Hang Seng Index Futures

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Hi traders,

 

For new traders looking for a place to start with minimal risk, I find the Mini Hang Seng Index Futures contract a good market to begin your trading journey.

 

This is due to the small tick size of $10HK or approx $1 USD. The focus should not be to make money but to learn the art of trading and focus on good trades. This will take time for new traders and the risk is relatively high for those that want to jump right into various popular futures market.

 

Hence, the Mini Hang Seng.... intraday trades can be placed with minimal risk of approx 20-30 ticks. That is almost equal to 2 ticks on the ES. A great starting contract for new traders. See attached contract spec and chart.

 

attachment.php?attachmentid=7271&stc=1&d=1215504237

 

attachment.php?attachmentid=7272&stc=1&d=1215504298

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Do any US-based brokers carry the HSI futures, let alone the mini-HSI?

 

-fs

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As James says its a low cost contract to follow. Its also technically good especially now that the bsds from Shanghai ran out of money and stopped screwing up the HSI (good riddance you b'stards). It's highly manipulated but the manipulaters are technical in nature and so you can rely on the patterns you develop by watching and testing on the HSI. Be aware that some days will be "different" to others; so I always used to use big stops on the first couple of swings until I got a feel for how the day was behaving.

 

You will notice that it's very thin but it is strongly tied to the HSI so very rarely diverges on the sub 5 minute swings by more than a tick or two. You can even trade MHI by charting HSI.

 

I strongly recommend IB for HSI/MHI trading. The charges are good; the margins are conservative; and they have a server right next to the HK exchange so you get minimum latency to the rest of the world.

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James, for some reason I couldn't edit my message. I was going to add an extra paragraph.

 

 

 

 

It's fast so if you use 5 minute charts on YM you might want to try 3 minute or 2 minute charts on HSI. Quite a lot of people seem to use 1 minute but I found that too fast for my signal development. Maybe we were using different trading principles.

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James, for some reason I couldn't edit my message. I was going to add an extra paragraph.

 

 

 

 

It's fast so if you use 5 minute charts on YM you might want to try 3 minute or 2 minute charts on HSI. Quite a lot of people seem to use 1 minute but I found that too fast for my signal development. Maybe we were using different trading principles.

 

Hi Kiwi,

 

Yes, the edit button is being fixed at the moment. Enabling the edit feature allows members to delete attachments which was the problem with PP. I am waiting for any fix on this.

 

I have been finding that some Asian contracts are better suited on a smaller timeframe. I traded the TOPIX yesterday on a 1minute chart and realized volume was easier to read... also surprised by the number of 1-2tick scalpers in that market.

 

Regarding plotting HSi for trading MHI, its some of the things I do for the mini Nikkei as well. I trade both since the mini allows me to get filled while waiting in line for the OSE contract can be a pain sometimes.

 

Mini-topix has been introduced recently. Still thin but thinking it should pick up as it allows the retail crowd to enter this contract. 500JPY a tick... similar to the mini Dow futures.

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My two cents worth.....

 

I used to trade the HSI not mini a couple of years ago. Its volatile cos its price weigthed. I watch it with another china index as you all know its related.

 

Did quite well with it and have been asked by a few traders in asia on its idiosyncracies. In a nutshell, its abit like dealing FX spot.

Not trading FX but dealing FX.

 

I found it nice for counter trend tading also but thats only for those who can flip a position on a dime.

 

Its a very nice contract to trade.....extremely enjoyable.

 

Don't trade it anymore cos I function only from London time into U.S.

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Mini-topix has been introduced recently. Still thin but thinking it should pick up as it allows the retail crowd to enter this contract. 500JPY a tick... similar to the mini Dow futures.

 

Hi soultrader,

 

I was just cruising through contract specs on the TSE website. Seems they introduced 3 new futures on June 16th 2008. The mini-topix as you pointed out, but also topix core 30 and a reit index. I can't find esignal symbology for any of these. Do you know how the volumes have been on these?

 

Btw, the mini-topix has a tick size of 250¥ per tick, but a tick is 0.25 rather than 0.50 points like the full size topix.

 

Thanks an advance.

 

All my best,

MK

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Hi soultrader,

 

I was just cruising through contract specs on the TSE website. Seems they introduced 3 new futures on June 16th 2008. The mini-topix as you pointed out, but also topix core 30 and a reit index. I can't find esignal symbology for any of these. Do you know how the volumes have been on these?

 

Btw, the mini-topix has a tick size of 250¥ per tick, but a tick is 0.25 rather than 0.50 points like the full size topix.

 

Thanks an advance.

 

All my best,

MK

 

Hi MK,

 

Volume is still pathetic. I have attached a daily chart and contract spec for both instruments.

 

attachment.php?attachmentid=7307&stc=1&d=1216258482

 

 

attachment.php?attachmentid=7308&stc=1&d=1216258482

 

attachment.php?attachmentid=7310&stc=1&d=1216258482

 

attachment.php?attachmentid=7309&stc=1&d=1216258482

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That's a shame, how about the mini topix? I can't find any volume stats on tse site. The spec makes this seem like it would be a great product. Smaller tick increment and smaller contract. I can't see why it wouldn't be as well received as the mini nikkei was -- can you?

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That's a shame, how about the mini topix? I can't find any volume stats on tse site. The spec makes this seem like it would be a great product. Smaller tick increment and smaller contract. I can't see why it wouldn't be as well received as the mini nikkei was -- can you?

 

Well theres really not that many private traders in Japan. Also, it will take some time to pick up. My assumption is that the mini-TOPIX will become popular similar to the mini-Nikkei due to the tick size. It allows more retail traders to enter the market.

 

Dont know about the REITS though.... cant really see it taking off. Below is a chart for the mini-TOPIX. Volume is slightly higher but still low. Give it a few more months.. we should see more volume in this contract. Also alot of local brokerage firms are offering free commisions on the mini-TOPIX for promotion.

 

attachment.php?attachmentid=7311&stc=1&d=1216261189

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Hi James,

 

I seem to remember you saying you don't use MP with the MSI is that still the case? Did you ever try dividing the profile into am and pm sessions? I just wondered as I am currently 'learning MP' in my spare time and am intrested in potential shortcomings.

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Hi blowfish,

 

I have tried this with using 15min bars instead of the 'traditional' 30min bars. It worked good sometimes, but with MP I found it to be too fine grained. I prefer to use MP as a broader tool focusing on the persistent forces of supply and demand.

 

On a totally separate topic regarding mini-topix that I was discussing with soultrader. I have contacted an IB rep and he said he will look into it when he is back in the office on Monday. He said: "If we can offer them we will."

 

My best regards,

MK

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The problem with any of the Mini Contracts is it is never going to appeal to any of the bigger traders.

 

I mean honestly, who REALLY wants that kind of tick size? It is appealing for the reasons Soultrader mentioned - new traders to learn on - but as far as being a trader and wanting to make a coin or two. Not really.

 

The "E-minis" in the US I believe are the only "mass traded" mini contract around the globe, probably because they were the first electronic version of their market which attracted the liquidity in the first place (i.e. versus the Big S&P in the pit.)

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There is a good arbing business on the mhi so it doesn't matter as much as you might think.

 

Re the ES being the only one ... the SGXNK is a mini for the full N225 (about 1/3rd size) and is very well used by everyone from retail to banks and funds.

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Yeah, I agree with you Kiwi. The mini nik in Osaka has seen steadily increasing volumes - especially during the recent volatility. Some days are doing near 1/2 mln contracts per day. To me, that is mass traded enough. Mini nik is 1/10th the full size.

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The problem with any of the Mini Contracts is it is never going to appeal to any of the bigger traders.

 

I mean honestly, who REALLY wants that kind of tick size? It is appealing for the reasons Soultrader mentioned - new traders to learn on - but as far as being a trader and wanting to make a coin or two. Not really.

 

The "E-minis" in the US I believe are the only "mass traded" mini contract around the globe, probably because they were the first electronic version of their market which attracted the liquidity in the first place (i.e. versus the Big S&P in the pit.)

 

As Kiwi mentioned the Nikkei SGX traded in Singapore is popular amongst institutional traders. The tick size is 1/2 of the OSE Nikkei. There are a few reasons why.

 

1. The SGX begins 15 minutes early at the open and 15 minutes early for the afternoon session. This combined 30 minute timeframe is extremely key to balance out positions amongst traders who have portfolios.

 

2. Lining up in que on the big OSE contract can be an issue. As the SGX Nikkei's minimum increment is 5yen, this makes it easier to enter and exit compared to the OSE Nikkei at 10 yen.

 

3. Plenty of arbitrage occurs between SGX and OSE. About 20% of SGX volume I would say is arb. (though this could be more)

 

Reason #2 also applies to why the mini Nikkei is quite popular. Its simply easier to take profits at a better price compared to the OSE contract.

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I strongly recommend IB for HSI/MHI trading. The charges are good; the margins are conservative; and they have a server right next to the HK exchange so you get minimum latency to the rest of the world.

 

Are there any other brokers beside IB for trading the HSI and Nikkei?

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What's the round turn commission on the Mini Hang Seng Index Futures? I assume it can't be much if traders are scalping it for a few ticks since the tick value is so small.

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also surprised by the number of 1-2tick scalpers in that market.

 

The comment above suggests that a scalp is the same as in another markets.

What is the daily range of this market?

 

You can check the IB website for an idea of the comms.

 

I am not familar with IBs website. Can't somebody just tell me the commission if they already know?

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