how to start futures trading (emini)
- Thread starter kashili
- Start date
I have to agree. I have an acct for equities and some conservative options strats, decided a few years back that I would take some and try out futures because I was sure leverage would work in my favor... not so much. With just under 10k, I can fully admit I was scared money. Closed my futures acct this year at about scratch and haven't looked back. Now I'm back to enjoying doing what I do - swing trading and some options spreads.
As has been pointed out, you ARE NOT READY to trade index futures as a primary trading vehicle. Hell, you don't even understand that futures by design are leveraged (ie margin) instruments.
That said, there is a parallel path with a less stern admonition. Instead of equity index futures, you might look at the traditional futures, such as agricultural or foods. These instruments while leveraged, are well suited for swing trading. More important, even with the full exchange performance bond (margin) parameters, your account size could support 1 contract, mini ag and micro currencies notwithstanding.
That said, there is a parallel path with a less stern admonition. Instead of equity index futures, you might look at the traditional futures, such as agricultural or foods. These instruments while leveraged, are well suited for swing trading. More important, even with the full exchange performance bond (margin) parameters, your account size could support 1 contract, mini ag and micro currencies notwithstanding.
I have to be honest with you. $6K is NOT enough money to trade with. For futures I would say 10K of risk capital is the minimum. MINIMUM! When I say risk capital, I mean capital you can afford to lose. This does not seem like the case. Even $10K is not enough to make a living from but barely enough to test out trading. For equities I would say you need more.
Trading without proper capital will force you to have very tight stops and not allow you to scale into a position. When you should be buying your second or third scale order, you will be selling out.
Sorry...1245
I also agree. Unless you can generate very steady returns with stocks, don't even think about futures. Tip: start out with the ETF SPY, once you have a system which achieves a Sharpe ratio higher than 2.0 multi-year through upturn, downturns and sideways movement, you are ready to switch to real money.
He can't trade SPY with $6K. He can trade one E-MINI S&P 500 FUTURES with $6K if he can find a FCM that will let him. Most have a minimum to open an account of at least $10K. He is just setting himself up to fail with too little capital.
http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500_performance_bonds.html
Hell, pick one of the fcm's on the sponsor list. AMP ES is $400 intraday, $4510 initial.
Nonsense, you can trade a few liquid micro futures e-contracts for much less than that.
Sick and tired of hearing ET members say that traders need thousands of dollars to trade, only brokers with a vested interest would make that kind of comments!