Choosing An Australian Market To Trade

[supermatt]

I am going to start up live trading again soon so I have been asking myself a few questions about what I want and what to look out for. Do any of you have some advice?

As I live in Australia, trading the ASX is extremely expensive. It costs $40 minimum per trade and by the time you buy and sell that adds up to $70 - 80 bucks or so. You can get discount brokers but you can only buy a small amount of shares and it still costs $15 per 1 way trade. The asx isnt really a day traders market and commissions do add up quickly. You can trade CFD's but thats a whole different story and im not really that keen on them. It does have volume though which is obviously a benefit.... hmm

I was looking into futures, most notably the asx SPI 200 index here which tracks the top 200 stocks. You can trade micro contracts at a few brokers for $1 a point which is ideal for someone new like me. The bad thing is its offered as a cfd which means the volume wouldn't be available or if it was it wouldnt be accurate as it isnt trading on the futures market. The other option would be open up an account at a futures broker but most need a 10 grand minimum account balance and I dont think im ready to put that money into a trading account just yet.

I keep coming back to the same market though... Forex..
Forex does have its advantages but obviously it has no volume which Brendan touched on in one of the lessons. Also you can get free data with your broker which again keeps your overheads low. The major pairs have low spreads of a couple of pips which is good.

but for someone new I can trade a micro/mini account with a small initial deposit which is appealing to me.

Another thing I look for is to keep my money in Australia as it is ASIC regulated and is basically governed by a set of rules which protects clients which is nice.

Anyway thanks for listening. feel free to leave some thoughts

[Brendan Egan]

I am going to start up live trading again soon so I have been asking myself a few questions about what I want and what to look out for. Do any of you have some advice?

As I live in Australia, trading the ASX is extremely expensive. It costs $40 minimum per trade and by the time you buy and sell that adds up to $70 - 80 bucks or so. You can get discount brokers but you can only buy a small amount of shares and it still costs $15 per 1 way trade. The asx isnt really a day traders market and commissions do add up quickly. You can trade CFD's but thats a whole different story and im not really that keen on them. It does have volume though which is obviously a benefit.... hmm

I was looking into futures, most notably the asx SPI 200 index here which tracks the top 200 stocks. You can trade micro contracts at a few brokers for $1 a point which is ideal for someone new like me. The bad thing is its offered as a cfd which means the volume wouldn't be available or if it was it wouldnt be accurate as it isnt trading on the futures market. The other option would be open up an account at a futures broker but most need a 10 grand minimum account balance and I dont think im ready to put that money into a trading account just yet.

I keep coming back to the same market though... Forex..
Forex does have its advantages but obviously it has no volume which Brendan touched on in one of the lessons. Also you can get free data with your broker which again keeps your overheads low. The major pairs have low spreads of a couple of pips which is good.

but for someone new I can trade a micro/mini account with a small initial deposit which is appealing to me.

Another thing I look for is to keep my money in Australia as it is ASIC regulated and is basically governed by a set of rules which protects clients which is nice.

Anyway thanks for listening. feel free to leave some thoughts

I agree and I think it is good that you are putting this much time into picking a market. It is one of the most important parts of trading, obviously, yet so many traders don't do any research before they take a plunge and open an account.

I would say open an account in a market you are comfortable with, meaning a market you actually want to trade, a market that financially you will be able to trade, and a market that has commissions that you can afford. Most importantly, make sure your money is protected and the market is regulated.