futures, EMINI: web sites for learning

I feel like this is becoming academic discussion.. you know sucssesfull traders trading emin with 5k??? Are those traders or gamblers?

I rest my case.. have fun !

As to someone asking a question about trading multiple contracts - the answer is simple : it is so much harder to make money trading 1 contract than trading 2 or 3 that I would advise anyone to start at least with 2 (especially when scalping). You take your profit immediately on 1st ( 2 or 3pts), and let the 2nd run and move to break even. You guys need to have that 2nd contract to make money. The 2nd will produce your income most of the time ( and you need those longer moves to offset your losses), while first one will keep your urge to take quick profit in check and you will be 'relaxed' and calm. You simply cannot make money with 1 contract - odds and emotions are against you.

There is so much to trading Eminis that it is hard to cover on this board..


PKJR

PS that's all I want to say in this thread, good luck to all!
 
I feel like this is becoming academic discussion.. you know successfully traders trading emin with 5k??? Are those traders or gamblers?

I know LOTS of traders trading eminis with $5k per contract. I know lots of day traders trading eminis that take on 2-3 contracts per $5k. It depends on your time frame and trading approach. $5k per contract for 1-5m bars is adequate for many short-term trading strategies. If you're position trading, you may need more or less depending on your risk factors.

If you're referring to a newbie trader starting out for the first time, slapping $5k down to trade eminis, then obviously the odds are against that new trader being successful just starting out.

But not all traders "new to eminis" are "new to trading". This is not academic hypothetical, this is real-life experience. I specifically know two traders (not new to trading) who started trading eminis within past 12 months with less than $10k and they have more than doubled their accounts.

Why does everyone think there's no chance in hell at successfully day trading eminis? Yes it's hard if you're new to trading, but then it doesn't matter if you're trading eminis or 100 shares of stock, it will be hard for a new trader trading any instrument. Eminis offers more leverage than 100 shares of XYZ stock so newbies would be wise to start out on something else.

I recommend lots & lots of paper trading. It won't guarantee success when you switch to real-time trading, but it's the cheapest way to get an education.
 
sorry to back track on you guys but how much does it cost to buy (a recent) emini s&p contract. how could someone buy multiple contracts with only a 5k account?
 
You can learn more about SPAN and margin requirements <A HREF="http://www.cme.com/risk_management/span/index.cfm" target="_blank">here</A>.

If you are only daytrading (not holding positions overnight), many brokers require much less margin per contract. Leverage can work for you or against you. You need to understand the risk factors associated with your trading methodology and apply proper money-management.

For example, if you're using an approach to take 2-4 points out of the emini S&P at a time your profit or loss per trade will be $100-200 + commissions + any slippage. As you can see, $5k is more than enough for such a strategy. Obviously if the methodology is not a winning one you'll lose money regardless.

There is no such thing as "day trading margin" as required by the exchanges. The exchanges require brokers to report margins on overnight positions only. So if you close out your positions each day, you will never get a margin call, only debit & credit to your account from your trading.

The day trading margin is set independently by each broker. Brokers set daytrade margins for two reasons. The first is obvious: to protect the firm from deficits. The second reason which is not so obvious is float. Firms get paid interest on the unused portion of customer funds. This of course translates into large profits. By requiring larger account sizes for daytraders, the firms make more money on the float.
 
Originally posted by cbp3
sorry to back track on you guys but how much does it cost to buy (a recent) emini s&p contract. how could someone buy multiple contracts with only a 5k account?
More...
With eLocalTrading (as an example), they will let you trade 2 ES or NQ contracts with a 5K account - quite a step up from stock trading when you consider that 1 NQ is equivalent to over $30,000 worth of stock! Of course, you'll also lose money much faster.
 
Dear all

NQ H2 currently is around US$161,000
ES H2 currently is around US$ 112,000

Multiplier: 30 and 50 respectively

I am a new IB customer

With US$ how can I buy 1 vontract of either NQ or ES?
Will IB give me a margin of 30:1?

What am I missing?

IB does not reply to my question (help@interactivebrokers.com)
they redirect to another link (www.cme....) which does not contain info about minimum margin requirements

Can somebody explain?
 
allesim,
yes.

also, IB is currently rolling out daytrading margin (50%) for select customers for select globex and A/C/E products. I assume it will be offered to a broader base if not all customers shortly.
 
Originally posted by allesim
I mean with US$ 5000 how can I buy 1 contract NQ?
Or 1 contract ES?
More...
You can look at a futures contract as an agreement between buyer and seller that one will pay the other a certain amount of money if the value of a stock index goes up or down. The amount paid is fixed as part of the contract ($20 per NDX point for the NQ contract). Unlike stocks, you don't really own anything when buying futures, so the only number of importance is the arbirtrary value that the contract assigns to each index point. The minimal margin requirement is then based more on the risk to the futures broker that the underlying index might move against you by a certain amount per day (thus margin requirements are lower if the contract is not held overnight). You're just placing a bet, with the broker sharing part of the risk, and they just want to make sure that you've got enough in your account to cover the typical movement of the index based on historical data ($2500, for example, would be 125 NQ points - an extremely unlikely one day move for the Nasdaq).
 
allesim,

The multiplier for NQ is 20, not 30, and plus you got the math completely wrong.

Also www.cme.com *does* contain information about margin, all though futures traders call it 'performance bond.' Check that site again.

voodoo
 
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