Futures account size for trading
- Thread starter ceaser
- Start date
This depends on your max drawdown and cushion needed for margin, nothing more.
So for example, if you have a win rate of 50% you can expect ~ losing streak of 10 over 1000 trades if every trade is independent.
If you lose $500 each time, then you need a drawdown of at least $5000. I'd double this because you can have a losing streak of 10, a winner and then another losing streak.
Then the rest of the account should be funded according to the margin needed to trade the size you desire. I'd double this as well.
Given a win rate of 50% with a 2/1 win/loss ratio where you lose $500 when you're wrong, then I would fund it with a minimum of 20K if you're using a discount futures broker.
If you don't know these numbers then you shouldn't try to fund an account yet.
So for example, if you have a win rate of 50% you can expect ~ losing streak of 10 over 1000 trades if every trade is independent.
If you lose $500 each time, then you need a drawdown of at least $5000. I'd double this because you can have a losing streak of 10, a winner and then another losing streak.
Then the rest of the account should be funded according to the margin needed to trade the size you desire. I'd double this as well.
Given a win rate of 50% with a 2/1 win/loss ratio where you lose $500 when you're wrong, then I would fund it with a minimum of 20K if you're using a discount futures broker.
If you don't know these numbers then you shouldn't try to fund an account yet.
Do you have your method ready?
https://www.elitetrader.com/et/thre...solid-trading-plan.340340/page-4#post-5031706
CannonTrading_Ilan
Sponsor
Depends on your risk capital to start with, after that pointers above about method, drawdowns etc. come into play. For daytrading, 10k is a good level. Most brokers will ask for a minimum account of $2500 or so.
Five times whatever the margin requirements. Thats a conservative starting point.
If you plan to day trade only Stock Index Futures (SIFs) you can start with less.
Say 2.5K and trade just 1 micro lot at a time to prove to yourself you can do it.
If holding overnight or trading something other than SIFs you will need more.
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$500-$1000 for micros. $2000-5000 for full contracts. However with high volatility many (or all) brokers raise the requirements on the full contracts. I've seen it go up to $16k back in 2020, guessing it may be $20k now. I haven't traded my personal account in a while, so maybe someone else knows better.