Making a living with a $30K account
- Thread starter l2tradr
- Start date
Quote from ess1096:
1) How did he daytrade without a margin account?
2) IMO, 10 contracts in a 30K account is risky.
3) Does he have a backtested system with a positive expectancy?
4) Is your "friend" really YOU?
1. I didn't say he didn't have a margin account. I said he didn't USE margin, only available cash.
2. I agree, and that's what I've been telling him
3. Yes
4. I wish I was there, but no
Quote from callmate:
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Ask your friend to get over his shyness and post here himself.
I suggest he reads and follows:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=83604&perpage=6&pagenumber=1
http://www.elitetrader.com/vb/showthread.php?threadid=99283
http://www.elitetrader.com/vb/showthread.php?s=&threadid=64965&perpage=6&pagenumber=1
Also read anything he can lay his hands on written by Jack Hershey on these forums. I am sure he will arrive at some kind of conclusion himself.
Good trading
He has a method he's comfortable and successful with.
If he is making 60% returns, why not use the 4x daytrading margin? With futures with 30 k and 10 contracts he will be trading on 25:1 margin in a lightning fast game filled with pros.
25:1 margin is suicide
You're friend hasn't factored in the pschological issues he's going to have with using such a highly leveraged trading instrument as the E-mini's, when he hasn't been using margin at all.
Futs are a completely different animal from stocks, trust me.
Have him do this:
$30 @ 10 cotnracts = $3,000 per contract.
Trade with 5 contracts only ($15,000).
Step 1: Build those 5 contracts into 10 contracts (leaving the $15,000 in reserve - very important).
Step 2: Build those 10 contracts into a years worth of salary in the bank, net.
Step 3: He's ready to leave his job.
If he can't do the above, exactly as I've stipulated, then he isn't ready to do it. If he can't turn the 5 contracts into 10, he isn't ready to trades futs (but fortunately, he will still have the $15,000 in reserve to do whatever else he wants to). If he can't put a year's worth of salary in the bank, as a financial and psychological cushion, well then most definitely isn't ready to leave his job.
Good trading,
JJ
Futs are a completely different animal from stocks, trust me.
Have him do this:
$30 @ 10 cotnracts = $3,000 per contract.
Trade with 5 contracts only ($15,000).
Step 1: Build those 5 contracts into 10 contracts (leaving the $15,000 in reserve - very important).
Step 2: Build those 10 contracts into a years worth of salary in the bank, net.
Step 3: He's ready to leave his job.
If he can't do the above, exactly as I've stipulated, then he isn't ready to do it. If he can't turn the 5 contracts into 10, he isn't ready to trades futs (but fortunately, he will still have the $15,000 in reserve to do whatever else he wants to). If he can't put a year's worth of salary in the bank, as a financial and psychological cushion, well then most definitely isn't ready to leave his job.
Good trading,
JJ