In that case, On your sim trader Buy 1 June S&P Mini symbol ES and simultaneously Sell 1 June Dow Jones symbol YM at the market. (All information needed at the CME website index or equity section, click on Contract Specs.)Then you will see the margin required, and how much your account moves as the market moves. Remember it's just a micro S&P, but will allow you to hold overnight or add to the position which can be worth a lot. Beware if you are trading for reversion, that spread can stay wide for a long time. 8 months one time. And after you get an idea, trim your sim account down to exactly what you have in real money and constantly ask yourself if you have the stomach for the strategy you are testing.Fair enough. I played online poker for a while so I have developed a bit of emotional resilience and some risk management
Beginner question - please recommend a market
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edit, I'm not recommending anything, just showing you a fantastic way to learn and observe how futures trade and a liquid cheap place to start.
and more edit, there may come times during the day when you want to take off one side and enjoy the lower daytrade margin most brokers offer. Or your evening trade margin.
Usually referred to as legging in or legging out, it also will be a good introduction to option trading which is just an offshoot of the futures markets, both are considered synthetic.
and more edit, there may come times during the day when you want to take off one side and enjoy the lower daytrade margin most brokers offer. Or your evening trade margin.
Usually referred to as legging in or legging out, it also will be a good introduction to option trading which is just an offshoot of the futures markets, both are considered synthetic.
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If that's the case, you should plan on spending at least a year or two of study. And I would suggest that you start analyzing and paper trading stocks. There are a zillion stocks and they will give you the maximum of exposure and a wide variety of experience in analysis. If you're going to do it, do it right without looking for shortcuts. When testing the depth of the stream, don't do so with both feet! You're young and have time. In the meantime, continue working and save every cent you can over the next two years. Then once you have built an initial plan that has proven somewhat successful in paper trading, start trading with a minimum number of shares and slowly increase your trading in line with your profits. Then after years of successful trading in the relatively easy world of stocks, graduate to futures etc.
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If he were to adopt your style, he have to forget what TA is all about and just jump in naked. Than he might start to see lights from the tunnel.
As Java said, trading the ES/YM pair can be fun, but it's a bit harder and more dangerous than you might think. Yesterday (Fri 6/09) was a good example. S&P down slightly and Dow up 90 points because with only 30 stocks...Dow is very sensitive to moves by its components ie Goldman stock up 3.68 yesterday. So you can put on the spread for good reasons (the ES/YM ratio is at 2 standard deviations from norm) ,and be wiped out if Goldman announces good earnings etc
30 against 500, it's hardly fair, that's why I said put it on 1:1 in sim and get an education before you get wiped out. The ratio changes but it is usually something like 7 ym to 5 es to get dollar neutral.
Stay away from forex.
You don't need a 10k account or a 25k account to start. You can start small, choose a liquid market, trade futures. Look for ZN, trade only 1 lot. If you lose 1k trading those contracts, stop trading, review what went wrong and put more money into your account until you no longer lose money consistently.
You don't need a 25k account to lose it all and start over again.
You don't need a 10k account or a 25k account to start. You can start small, choose a liquid market, trade futures. Look for ZN, trade only 1 lot. If you lose 1k trading those contracts, stop trading, review what went wrong and put more money into your account until you no longer lose money consistently.
You don't need a 25k account to lose it all and start over again.
yes zn is another excellent vehicle, perhaps the best of all. If you like to analyze it's a spreaders paradise. That little contract has confounded more brilliant thinkers than perpetual motion.
With $5k bankroll your only reasonable choice is to find good ECN broker locally or anywhere in EU.
People in US don't understand that there are plenty of ECNs brokers in EU, that while they carry "forex" in their name, they have little to do with how forex brokers used to (some still) work.
The main advantage is that for currencies not only you get much tighter spreads than CME, but more importantly you can buy mini (0.1) and micro (0.01) lots (or any size you wish) and your commissions are paid based on the size traded. So if your size is 0.54 of one lot, you pay 54% comm.
The spread, freedom of sizing and comms based directly on size traded are one of the most important aspects for underfunded traders. Add to that that you have a large selection of currencies including exotics, and you can also trade CFD's for many US based futures. Yes the spreads on CFDs are not exchange like (i.e. 0.6-0.8 in ES, 0.06 in CL) so you are not going to scalp but your fills are guaranteed and again you can trade any size you wish including mini lots (or even 0.05 lots in futures) and pay comms accordingly.
You will also get free market data and some charting software for free. All of that will get you started and let you learn the markets, allowing you to make thousands of micro trades before you get wiped out and see how hard it is to make money in the markets.
In your particular situation, the only positive to trading directly on US exchanges would be avoiding income tax as US based brokers would report it to your tax authorities. But taxes on profits are not something you need to be concerned about at this point as you're not going to see profits for a long time. And everything else is against you: the bankroll is too small, product selection is limited (well you get spreads, options etc but again not for that kind of bankroll), sizing is full contracts only, just few 1/10th size, but comms are based per each car (so 2 micros=0.2, if available, means 2xcomms). Also you will need to pay for software and data feeds, both live and historical.
IMO you should start with a good ECNs broker for all the reasons explained above.
As far as the products and strategies, you can traded anything you want and anyway you want. In fact you should not copy anyone. Put up some work and research and get your feet wet. By trading 0.01 or 0.05 lots you stand a chance of trading long enough to find an instrument and strategy that fits you.
Once you get that down and are ready to put up some more money ($10k min), then you could move to US based exchanges, provided the products there are your choice.
When you trade futures with a small account you have serious disadvantages working against you - not to mention newbies get eaten alive. Unless you have a solid track record of making $ in the stock market for a few years I would stay away from futures, it is like trying to learn surfing at Hawaii's pipeline on a 40' day. Your far better off concentrating on building your account up, from saving as much as you can, while maybe taking very infrequent trades of ETF's like SPY/QQQ/IWM/etc.
Or you can join the 96% club - they bet big with small accounts, pure greed/casino mode- most of these type of dreamers accounts are closed inside of a few months.
http://www.reviewon.com/trading-the-commodity-futures-market-can-be-a-fools-game.html
Or you can join the 96% club - they bet big with small accounts, pure greed/casino mode- most of these type of dreamers accounts are closed inside of a few months.
http://www.reviewon.com/trading-the-commodity-futures-market-can-be-a-fools-game.html
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