LOL ET ... you're arrogant to the point of funny. I'm guessing that'll pay off in your trading.
Personally I stopped trading HSI because of a number of factors. The primary one was that it had gone "wild" after the Shanghai traders arrived and the tight stop strategy I used was invalidated by huge gaps. I built an alternative strategy that worked but I didn't "like" it so it seemed more useful after 3 years of trading nothing but HSI to have a shot at adapting to some other markets instead.
I spent over a month experimenting with KOSPI, SPI, STW, Nk and the currencies that trade during my "day."
So now I trade SPI, STW, and a currency having adapted from the fast and fairly disorderly old HSI style to their orderly and initially staggeringly slow styles. The adaptation was interesting and has probably made me a considerably better trader. The interesting question (for me) will be whether I choose to go back to the HSI later when it drops into "normal" behaviour --- if it does later this year or in 2009.
The comparison you make between ranges and spread is actually wrong. The reason its wrong is that spread doesn't account for risk ... its just an indication.
Your comparison was:
Code:
range spread value
hsi 700 5 0.007142857
es 22 0.25 0.011363636
ym 240 2 0.008333333
But the spread of 5 is not representative of the risk involved.
With ES (or STW or NK) you have some depth with rare exceptions (news events typically) then your stops will have little slippage beyond the spread.
With HSI in its current mode (assuming its behaving as it was in the earlier thread still) the gaps will give slippage way beyond the "5 point spread." Back on 11/15 I posted some pictures of gaps from that day:
11, 17, 22, 28, 38 points
so thats:
2, 3, 4, 6 and 8 times the 5 point spread.
Anyone considering trading HSI should evaluate the likely slippage against their stops vs other available choices not just the (probably thin) average spread. Just imagine the joy when your 20 point stop becomes a 58 point stop if you lucked out on the worst example from 11/15 (in the good old days I was using stops below 9 points for targets of 30-70 points so you can see how a fairly serious adaptation would be called for
).
As always, do your own homework, but do do your best to assess the risks intelligently.
