Futures or Stocks ?
- Thread starter sahheng
- Start date
prox,
Thanks...that's what I was looking for. I'll probably start with $10K and only 1-2 contracts and see how it goes.
Thanks...that's what I was looking for. I'll probably start with $10K and only 1-2 contracts and see how it goes.
A newbie who tries to trade with less than $12-15,000 per one lot is almost certain to blow out, and that assumes no overnight risk. You need to be able to survive a 50% drawdown and still be able to trade with a comfortable margin:equity ratio.
Most pros say do not run more than 1-1.5% risk on any trade. A newbie probably needs at least a 3 point stop in the ES. That translates into 1% risk on a 15k account. For a 5k account however, you are risking 3% per trade. That's too risky for professional commodity pool operators, so how good a chance will a newbie have?
Well, you could always use a tighter stop and risk less, right? The problem is that's only half the risk equation. The other half is how many times you lose, and the tighter the stop, the worse your win/loss ratio will be. What is optimal varies with your entry strategy and market conditions. But I'm betting it's a lot bigger than many would assume. It sure isn't going to be 1- 1.5 ES points.
yes, yours
Well, I'm not an utter newbie. But newbie to E-mini trading. I've only made one E-mini trade. I bought NQ, with a $3,000 account, and I held it for 10 days+nights, with a 30% loss for a day or so. Ended up with a 15% profit when I finally closed it out.
Overnight really isn't all that bad, in a way it's less bad with the E-mini because you can trade it on Globex throughout the night. I'd say that's a real advantage.
But a real newbie, definitely ought to start smaller, and with Single Stock Futures they can do just that. Trading a contract on a $10 stock, they'd only have to put up $200 for margin. I think it's a good way to learn.
p.s. I would definitely elect Mary Tyler Moore.
