xelite, you seem like a really smart guy and I enjoy your posts (especially regarding backtesting) but this one I have to respectfully disagree with. I found micros like M6E are ok for longer time frames but if you want to play futures, lets be honest you want ES, NQ, ZB... etc. The books aren't really comparable. Is there any reason to not go with IB fx or some other fx shop with tiny lots to start if that's what you're looking for?
how to start futures trading (emini)
- Thread starter kashili
- Start date
xelite, you seem like a really smart guy and I enjoy your posts (especially regarding backtesting) but this one I have to respectfully disagree with. I found micros like M6E are ok for longer time frames but if you want to play futures, lets be honest you want ES, NQ, ZB... etc. The books aren't really comparable. Is there any reason to not go with IB fx or some other fx shop with tiny lots to start if that's what you're looking for?
With 6K you should stay WELL AWAY from futures. Right now maintenance margin set by CME currently is around $5K for the emini. So you have $1K loss you can absorb before liquidation.
With 1 contract of ES, you can take a 20 point move on the S&P before you are wiped out.
Personally I think people with accounts less than $100K should stay away from ES or futures. And for those with $100K, at most be taking 2-3 contracts at a time and only leaves room for 1 more double down before its road of no return.
With 1 contract of ES, you can take a 20 point move on the S&P before you are wiped out.
Personally I think people with accounts less than $100K should stay away from ES or futures. And for those with $100K, at most be taking 2-3 contracts at a time and only leaves room for 1 more double down before its road of no return.
give your self credit for learning how to break even,that takes a much needed amount of discipline, futures are the same as anything else you trade,but 6k is a small acct for a beginner,if you have the patience , we get on avg about 3 trend days a month,if you take a up volume compared to down volume chart, you will notice on trend days that one of them (uvol or dvol) flatlines while the other rises all day,if you have the patience to sit each month and wait for those,you can easily increase your acct while sim trading the other days as you learn, one suggestion would be learning how to read the market from macro down to daily down to intraday, a lot of options there, market profile is an easy tool to master
http://i.imgur.com/Mnx7AuK.png
unanimous response about readiness.
few clarifications:
-I am not trying to make money for living; trying to expand to other asset classes, with minimal damage; I trade covered calls, event based picks, anticipated spikes(ETF on volatility;dividends). Example: holding for last ~2 weeks GILD, DO, ENR (and loosers like CLF, WLT,; boring picks like NOK,MA)
-my positions are <10K$ or <500 size in one stock; my holding period is ~ 1-4 weeks for stocks; I am at most 50% in market on any day.
- I have not used charts (though I have rough idea) and from my cursory reading it seems charts is primary tool for decision making for futures (what else?)
I am trying to allocate minimum capital to future for first 1-2 years as I learn the futures market
I understand margins and market structure (for equities) very well and some minimal theory outside equities (and using order entry platforms); my undergrad is in econo/finan (from top 10 in US)
dont mind to put more $ into future trading; but where do I start for A,B,C of entry and exits for futures (topsteptrader??)
New on this forum (randomly landed here) and glad to see so many responses
few clarifications:
-I am not trying to make money for living; trying to expand to other asset classes, with minimal damage; I trade covered calls, event based picks, anticipated spikes(ETF on volatility;dividends). Example: holding for last ~2 weeks GILD, DO, ENR (and loosers like CLF, WLT,; boring picks like NOK,MA)
-my positions are <10K$ or <500 size in one stock; my holding period is ~ 1-4 weeks for stocks; I am at most 50% in market on any day.
- I have not used charts (though I have rough idea) and from my cursory reading it seems charts is primary tool for decision making for futures (what else?)
I am trying to allocate minimum capital to future for first 1-2 years as I learn the futures market
I understand margins and market structure (for equities) very well and some minimal theory outside equities (and using order entry platforms); my undergrad is in econo/finan (from top 10 in US)
dont mind to put more $ into future trading; but where do I start for A,B,C of entry and exits for futures (topsteptrader??)
New on this forum (randomly landed here) and glad to see so many responses
The margin requirements for trading the liquid enough M6E (E-Micro Euro/USD) is a ridiculous $150, as we speak.
Are you telling me that starting with a $6000 bankroll is not enough then, Jo0477?
I am not looking for anything, I already trade standard lots (100K) in the Forex market.
Unless you have a large account with a lot of room to take in a lot of pain, or you allocate a large portion of your equity to support futures positions, you are probably not ready.
Theres nothing more to learn about futures. In a normal environment, and away from expiration, the closet month emini tracks the S&P 500 & SPY pretty closely due to a lot of hedging activities that goes on by participants. Its basically just a leveraged way to bet on the S&P. To a trader it works the same as betting on the SPY directly, but with a lot more bang and different commission structure. It also trades 24 hours a day so that might or might not be an advantage to some.
But unless you have a large account or large capital allocation to support futures positions, you will not cut it. Your $6K capital to futures can sustain only 20 point move with 1 contract, or 10 point move with 2 contracts, or 6.6 points move with 3 contracts, etc - before you hit stop loss territory. I can't even name how many times the S&P moves 20 points during FOMC or other random dates.
You don't have staying power. People who trade futures allocate a lot of margin room to support their futures positions.
Of course, maybe there are a few mega speculators who go 100% all in with futures maxing out free margin, and then time markets perfectly and make huge $$. Thats possible. But more often than not, you enter a position and the price immediately goes against you.
The margin requirements for day-trading the liquid M6E (E-Micro Euro/USD) is a ridiculous $150. as we speak.
Are you telling me that $6000 is not enough then?
haha! not at all. But I have to think if you're looking for liquidity spot fx makes more sense in this space. By all means, I welcome any and all opinions but I'd take Oanda or something over M6E having compared it to its big brother. Just my personal opinion mind you. Actually, I just noticed that Oanada has bonds as well, something else that has piqued my interest. Regardless, best of luck OP in whatever path you choose.
Edit: Just saw xelite's response and wasn't referring to you personally. Was referring to OP who seemed to want to control tick size.
Why not SPY? It's a regular ETF! The guy can always become a client of mine, min. capital requirement of $5,000 as a non-US resident and initial margin requirement of $2,700...
Why not SPY? It's a regular ETF! The guy can always become a client of mine, min. capital requirement of $5,000 as a non-US resident and initial margin requirement of $2,700...
SPY closed at 188.06. So if he trades SPY the most he can buy is ~30 shares not including commission. Ticket charges and/or minimum commission fees make his break even to high for scalping. I not saying he can't enter an order. I'm saying this is not a good business decision or use of hard earned capital.
If you lose this $6000 that you earned after taxes, how long will it take to replace with your full time job? If the answer will be a short period of time...go have "fun". If the answer is a long time..stay away.
1245
Well then I agree, I thought the issue was more from a technical viewpoint...