Futures are for Day Traders,is 30 mins chart gear to day traders?
- Thread starter Azharr
- Start date
how about OTC forex where 1 pip can be as little as 1 cents or even less? what is your opinion?
With my current situation I don't think joining a house is possible, it's no where near here.
I am in a rural area (palm oil plantation) and my wife was posted by the government to teach these rural kids - my trading goal is to hey in this area USD $50 a day on average is more then enough to have a decent living...
internet connection: 1mbps ADSL
You need around $ 1,500 to trade a single contract in futures. I will assume for sake of argument that you have been able to make profitable trade on a SIM account. If not, stop, and trade sim for awhile.
By trading 1 contract, you should be able to make $ 250,000 per year. This assumes you have an edge and proper money management, plus that you can control your emotions.
The benefit of trading futures or forex is that you get leverage. Having more capital is meaningless. If someone has a large account, he or she is going to max out on 10 contracts with no stop and lose a ton of money. So trading 1 contract with a large or small account is exactly the same in how much money you make or lose.
When testing out a new system keep the contract size small until you have proven with real money that you are profitable then can slowly increase the number of contracts that you trade.
If you trade during the day, you have to use a smaller time frame in order to catch the swings.
Now its very possible, when you switch from sim to real money, you will blow out your small account or big account if you have a big account. By using a small account, you will only lose a little money while learning to trade. Once you blow out your account, go back to sim, determine what you did wrong, then open another small account. If you are doing well, you can always add more money to your small account to make it a medium sized account. The benefit of trading with a small account is you get to feel the reality of emotions when trading with real money.
By trading 1 contract, you should be able to make $ 250,000 per year. This assumes you have an edge and proper money management, plus that you can control your emotions.
The benefit of trading futures or forex is that you get leverage. Having more capital is meaningless. If someone has a large account, he or she is going to max out on 10 contracts with no stop and lose a ton of money. So trading 1 contract with a large or small account is exactly the same in how much money you make or lose.
When testing out a new system keep the contract size small until you have proven with real money that you are profitable then can slowly increase the number of contracts that you trade.
If you trade during the day, you have to use a smaller time frame in order to catch the swings.
Now its very possible, when you switch from sim to real money, you will blow out your small account or big account if you have a big account. By using a small account, you will only lose a little money while learning to trade. Once you blow out your account, go back to sim, determine what you did wrong, then open another small account. If you are doing well, you can always add more money to your small account to make it a medium sized account. The benefit of trading with a small account is you get to feel the reality of emotions when trading with real money.
Let's say for sake of argument that you trade ES. Let's say for sake of argument you went long market with a 4 tick profit target and a 4 tick stop loss. If ES moves 4 ticks in your favor you would make $ 50, if it moves 4 ticks to your stop loss, you would lose $ 50.00
During the day a good broker will allow you to trade with real margin of $ 500 per contract.
So once you determine how much you are going to risk, you are then able to calculate how much you need to have in your account. So do you really need $ 20,000 if you are risking just $ 50.00 or will you be able to maintain a smaller account say $ 10,000 or $ 5,000.
During the day a good broker will allow you to trade with real margin of $ 500 per contract.
So once you determine how much you are going to risk, you are then able to calculate how much you need to have in your account. So do you really need $ 20,000 if you are risking just $ 50.00 or will you be able to maintain a smaller account say $ 10,000 or $ 5,000.
If you are making a few trades a month, and looking for swing trades, and don't mind getting killed on the commish and spread, then maybe the micros could work, I don't know. You would have to factor in add'l capital to accommodate these other factors that will be working against you. If you went this route, I'd figure for at least $4,500 per micro, assuming they really are 10-15% the size of a mini.
Why make the game harder? Better to study and save more $$$ and use the proper mini contract that offers tight spread and high liquidity.
The only truth in this post is that if you are going to overleverage, the large account will in fact be a worse idea. If you do not have self control, then yes, do *not* open a big account. In fact, do not open *any* account. Just relax. The markets will still be here when you're ready.
The rest of the information is all there to help you separate yourself from your limited, hard earned cash.
$50 stop will not work because of spread/commish/slippage/execution issues.
The smaller the time frame, the more unpredictable things become, so it's more likely you will have a ton of stop losses, esp if using something ridiculous like a "$50 per contract stop".
$500 margin lets you save maybe $2k on your cap. allocation. So, instead of $20,000, maybe you're allocating $18,000. It also conveniently offers the typical retail trader enough rope to hang them self over and over. Reload!
As for keeping less than the recommended $20k / contract in the account, sure, if you have the maturity to actually keep your cash reserves handy and not re-allocate them to another 'investment', then maybe this works. If you do not mind 'depositing' more funds on draw down or answering margin calls, it might work. Psychology is a big part of the game, and what works for you might not work for me.
I am giving an example. In some instances a 4 tick stop loss is more than enough to determine that you are on the wrong side of the market. One has to come up with their own trading plan. I agree if you are looking to get 4 - 8 points of ES and hold overnight, you need at least $ 20,000. It depends on what trader you are. If you are a scalper or a longer term swing trader. No one is the same, what works for you might not work for someone else. This has to be in your trading plan. However, saying there is 4 ticks of slippage and huge commission is wrong. I have never seen it in my many years of trading. If you get in on a limit order and get out on a limit order, there is at worst 1 tick of slippage.