Originally posted by Instant Karma
Hi aphexcoil
When you trade 1 ES contract you are way over-leveraged, the question is not if you are going to lose all your money but when.
As far as i can tell you have one solution:
- put more money in your account (30-40k)
Other solutions include -quit (not fun), trade QQQ/SPY 3 times a week(learning curve = 10 years).
While learning the trade, you should have one obssession:
-staying alive-
good luck
I couldn't have said it better. IMO who in their right mind would try to daytrade under 25K? It can't be done. Getting in and out of positions is crucial and the last thing you want to be thinking is "oh no the trade is going sour but i can't sell or i will burn off one of my three daytrades/5 days." -(Not talking about futures here) Trading is all about probability, and at times you will need to exit at a loss even the best of setups. Those three permitted daytrades will go fast and you are going to be sitting out most of the trading week at a loss and feeling terrible.
Even if you win most of your daytrades for nickles and dimes you are still out the game for a week after three daytrades with stocks.
Isn't this obvious after a moments reflection? Why does it even need to be stated to someone who has been strudying the market for many months like you said you have been, right aphie?
I also wouldn't try to begin with futures either for the same reasons as Instant Karma. Your account is going to burn down fast learning on the futures and this will make you even more scared to trade than you are now.
IMO, If I were to trade under 25K, I would look for a DAILY strategy, spend hours and hours and hours scouring for such a strategy (ET is a great place to start, and "inandlong" has some interesting things to say about this), then having found something promising I would spend many many hours backtesting (manually if i had too) to get a feel for what the outcome would be and the risks in the real world. Does the strategy seem to work or not is one thing you are evaluating BUT I would also try to imagine what the worst case scenerio would be trading the strategy, and then imagine how I am going to feel when it happens because IT WILL HAPPEN. "Can I live with it" is what I would be saying to myself, and what & when is going to be my next move/trade when it does happen. If the loss will devastate or paralyze you with fear and anxiety, then DON'T DO IT. The strategy is too risky for you at this time. Keep looking.
Even after all this backtesting and researching and contemplating I would be skeptical of the dam thing ever working, and would proceed very cautiously with only 50 shares to begin with. The object at the beginning is not to make money at first but to try to AVOID LOSING IT. There is a difference here. The winners are easier to trade, it's the losers that give us trouble.
If I had only 5K, 50 shares would not scare me much even if a stock I was holding overnight gapped against me 2 points or so. In this event I'd only be down a hundred bucks. (Now if it gapped against me 8 points like IBM did yesterday i'd be sh*tting my pants but hey .."you pays your money and you takes your bet"). But remember this is all predicated on having a strategy that is likely to succeed because I spent an obscene # of hours researching and painstakingly backtesting it manually, thinking about what could go wrong, testing some more, then wondering what else could go wrong, more testing ("what am i missing cause this seems to work" I would be thinking
and after all this if I was satisfied I had a likely system and i could live with the worst outcome (you won't have any probs dealing with best outcome should it occur
) I would place my 50 share bet and cross my fingers (and watch it very closely).
Then RE-EVALUATE! And RE-THINK ...
regardless this is just my opinion and you shouldn't believe me anyway...LOL
