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Looking for "Toraku" Nikkei Advance Decline Indicator
If you can provide me with a link to the logic behind the indicator, I can have it added to Firetip X today. I did some googling but wasn't able to find much.
Thanks,
Mike Murphy
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Ironbeam Futures
Phone: 312-765-7228 | [email protected]
Mike, unfortunately, I don't have a link as I am looking for it myself. The logic behind this is as follows (please correct me if you think I am off track, or let me know if there is an alternative to what I am looking for): Basically, I want an advance/ decline indicator for the Nikkei 225. The reason is that there appears to be a very strong correlation between the NKD and NQ in Globex after hours trading. NQ seems to follow NKD. However, since they are moving almost simultaneously, it would be better to get an AD indicator for NKD in order to get a sense of where NKD might go next, so as to get a handle on where NQ might go. (ZB is also good, but not as strongly correlated). That was the impetus behind me looking for the Toraku indicator, which I understand to be an NKD AD indicator.
That said, since I posted this, I did quite a bit of research and it seems that Bloomberg Terminal is the only place to get Toraku, and that it may not even be real time on Bloomberg (not sure about this). That's way out of my price range. So I am still looking for an advance / decline indicator for NKD or Topix more broadly.
Haven't seen an AD indicator for Nikkei 225 before, but I trade the Mini Nikkei futures and use a TICK indicator for the TSE provided by Interactive Brokers, they also have a TRIN indicator;
I just remembered I did once try to make a AD indicator plus other stats using Investor RT and the individual components of the n225 (from TSE stock feed through IB), it did work but was a lot of effort, ended up just using the singe TICK.
A few thoughts, as someone who trades the Nikkei and asian session quite regularly (3 out of 5 evenings at least per week here recently):
1) Do you trade the CME NKD contract? If so, I highly, strongly, hugely recommend that you instead trade the MJNK -- I think IBKR has it, but I trade it on CQG through AMP futures. It does a million contracts a day or so, compared with NKD's several thousand. It's highly liquid (the most liquid futures contract in Asia, bar none), like ES (500-800 on the book at each level). Even if you have to open a small account only to trade that--if you're serious about trading the Nikkei, there's no other contract worth doing it with. $500 margin per contract, $4.60 per tick, commissions about $1.71 per R/T
2) US equity indices (the big 4: ES, NQ, RTY, YM) do strongly correlate with the Nikkei. You might also consider the hang seng index (HSI). AMP also offers this, and I have traded it in recent weeks with pretty good results. It's like the DAX on steroids. The best use for it though, is to gauge sentiment on the Nikkei and US markets, particularly with the ongoing trade war.
As an example, on Thursday evening I took a Nikkei long based on what the HSI was doing -- I expected a HSI selloff just before their lunch started (when HSI futures actually stop trading, unlike Nikkeis which continue to trade through their lunch). Nikkeis were quite bid and I wanted to be long, but expected the HSI sell and expected Nikkei weakness. As HSI sold, Nikkeis did too, and I got in a trade that worked beautifully. Currently, when the HSI futures open at 8:15 ET and the index starts trading at 8:30 ET, it's the #1 driver, and both US futures and Nikkeis are taking cues from it.
All of this is to say that when Asia trades, US markets are not commonly the driver, though any china trade war news certainly will be. Look for the driver, and gauge how safe haven assets trade (bonds, yen, bunds, gold). Sure, getting A/D info on the underlying 225 stocks in the index (or all in the TSE) could be advantageous, depending on your strategy, but there are plenty of other correlations to watch which can be extremely helpful in trading the Nikkei.
