I have paper traded crude before and have a good setup that seems to be highly accurate.
Advice for a new futures trader
- Thread starter ct_investtrader
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I have paper traded crude before and have a good setup that seems to be highly accurate.
Depending on you strategies, another alternative is a crude ETF. You won't be able to scalp it, but I'd imagine you'll be able to do some decent swing trading with it. Along the way you will learn more about the market.
Since you only have limited time, you could develop and backtest a weekly trading system over 20 or 30 years of data and trade that at very low leverage.
The just look at it on the weekends when you have the time.
Forex is good because you can trade any small amount of capital without a fixed contract size or leverage. For example, just trade $2000 unleveraged. Or, if you really want, at a small leverage ratio of 2 or 3. That way you do not have to worry about it during the week.
Or the crude ETF as another poster suggested.
The truth is that you need to learn by LOSING initially, so expect that.
You need a broker with low commissions. Interactive Brokers will do but they may not accept your size of account.
The just look at it on the weekends when you have the time.
Forex is good because you can trade any small amount of capital without a fixed contract size or leverage. For example, just trade $2000 unleveraged. Or, if you really want, at a small leverage ratio of 2 or 3. That way you do not have to worry about it during the week.
Or the crude ETF as another poster suggested.
The truth is that you need to learn by LOSING initially, so expect that.
You need a broker with low commissions. Interactive Brokers will do but they may not accept your size of account.
Just trade an energy ETF for now.
You can find ETF's that track crude very closely.
If you want to trade it more frequently than the pattern day trade rules allow, you can make it a cash account and PDT does not apply/
Later if you can make it work you can move to futures when you have more capital.
If you want to trade it more frequently than the pattern day trade rules allow, you can make it a cash account and PDT does not apply/
You can find ETF's that track crude very closely.
If you want to trade it more frequently than the pattern day trade rules allow, you can make it a cash account and PDT does not apply/
Later if you can make it work you can move to futures when you have more capital.
If you want to trade it more frequently than the pattern day trade rules allow, you can make it a cash account and PDT does not apply/
Spend $750 & buy CL entire history from TickData, or spend $1300 & buy 30 year-symbol (you only need CL since Jan-2007, before it wasn't trading on Globex 24/7, so that's 6 year.symbol used just there, you can add ES & 6E since July-2003 - before that, timestamps do not include the second, so they are no good for anything below 1min-charts, and you still have "room" for a few years of another market).
Download NinjaTrader, simulated-trading edition - free of charge.
Learn C# - start using your historical data to search for recurring "patterns" - the elusive edge - when you have found your 1st solidly recurring pattern, program a strategy in Ninja, learn to backtest, review in details every single trade result out of backtest, when that seems good, do the same using market replay, when that seems good, do the same, on your broker simulated account, when that is good for a few weeks or months, you can go live.
Download NinjaTrader, simulated-trading edition - free of charge.
Learn C# - start using your historical data to search for recurring "patterns" - the elusive edge - when you have found your 1st solidly recurring pattern, program a strategy in Ninja, learn to backtest, review in details every single trade result out of backtest, when that seems good, do the same using market replay, when that seems good, do the same, on your broker simulated account, when that is good for a few weeks or months, you can go live.
With $6k and 2% risk max, you have a max stop loss size of $120 and still have a decent (not large, but decent) risk of ruin, even assuming some type of positive expectancy.
This doesn't even take into account the initial margin requirements of your chosen instrument. Taking into account initial margin requirements, your stop loss size is reduced greatly.
Can someone run some basic RoR calculations here for OP?
Just based on observation, you would likely want something like $20k per contract, or more, to be safe and truly minimize odds of failure. And, without a positive expectancy, you should not be trading at all.
My advice is to save your money and perform more research. The market does not need your $6k as much as you do.