Platform recommendations

[ddunbar]

Quote from Drew07:

OK so say im a complete newbie and don't know what I'm doing......If I put up 2500 and get my ass kicked...what does another 2500 do to save me???....I just look at it as another 2500 I have in my account to lose...If i lose the initial 2500, I can regroup, take a step back and look at what i did wrong and come up with another 2500 to take a shot with. I think its enough to get me started...someone give me a mathematical reason why its not a good idea.

Well, first of all, there are not that many future's whose performance bonds are less than $3000. Sure, intraday margins tend to be at the 50% level with the occasional exception of a broker like Open-E-Cry who will let you day trade with $500 intraday. But that's only if you have $5k in the account. Or so I believe.

Anyway, it's not that you'll lose $2500. It's that just a few series of loses takes you out of the game because you won't be able to afford the performance bond.

And the name of the game when you're a noob is survival. Most noobs don't get this and it's the reason why most noobs fail.

For example... ES: init $3500, maint $2800 - intraday(50%): 1750 init, 1400 maint.

With a $2500 account, you can only lose 15 pts before you're out of the game. And we're going to assume you'll lose this engaging hard stops and not mental stops.

If you had a $5000 account, you could lose 65 pts before you're out of the game. The probability of you losing 65 pts is obviously lower than the probs you'll lose 15 pts.

I can give you game theory and statistically probabilities but keeping it simple seems best.

Be serious about trading and give yourself a winning chance.

 

[Drew07]

Quote from ddunbar:

Well, first of all, there are not that many future's whose performance bonds are less than $3000. Sure, intraday margins tend to be at the 50% level with the occasional exception of a broker like Open-E-Cry who will let you day trade with $500 intraday. But that's only if you have $5k in the account. Or so I believe.

Anyway, it's not that you'll lose $2500. It's that just a few series of loses takes you out of the game because you won't be able to afford the performance bond.

And the name of the game when you're a noob is survival. Most noobs don't get this and it's the reason why most noobs fail.

For example... ES: init $3500, maint $2800 - intraday(50%): 1750 init, 1400 maint.

With a $2500 account, you can only lose 15 pts before you're out of the game. And we're going to assume you'll lose this engaging hard stops and not mental stops.

If you had a $5000 account, you could lose 65 pts before you're out of the game. The probability of you losing 65 pts is obviously lower than the probs you'll lose 15 pts.

I can give you game theory and statistically probabilities but keeping it simple seems best.

Be serious about trading and give yourself a winning chance.

Makes sense, but I'm assuming I wont lose 15 points right off the bat and be forced out of the market. Maybe I'm overconfident that I can stay within the range of breaking even for a while. I guess I'll find out sooner or later. Thanks for the advice.

 

[o10maximus]

If you're a complete newbie don't trade at all for at least 6 months!

You can do free live demos that offer charting w/ most brokers. This will give you an idea if your interested.

A couple points.

OEC isn't so hot in a fast market, and just average under normal conditions.
Transact and Dorman are pretty solid, maybe Mirus too.
Transact/Sierra is solid.

No monthly fee's w/strategy runner would also be cost effective until you learn.

 

[ddunbar]

Quote from Drew07:

Makes sense, but I'm assuming I wont lose 15 points right off the bat and be forced out of the market. Maybe I'm overconfident that I can stay within the range of breaking even for a while. I guess I'll find out sooner or later. Thanks for the advice.

You're welcome. Last tidbit:

Always assume the worst in trading. It helps you properly prepare and hone your skills. Unless you've discovered the holy grail of trading, you will suffer loss. The easiest way to plan for break even is to plan not trade at all.

 

[jimmygold]

Quote from ddunbar:

Well, first of all, there are not that many future's whose performance bonds are less than $3000. Sure, intraday margins tend to be at the 50% level with the occasional exception of a broker like Open-E-Cry who will let you day trade with $500 intraday. But that's only if you have $5k in the account. Or so I believe.




This is NOT correct. Iam with Global and trade Intra Day YM. I am starting out with just 2K. You can start out with only $500 total which is margin for intra day on one contract. But it is NOT advisable because you will not have wiggle room for potential maintenance call.

But $2500 is more than enough to get your feet wet in trading intraday on one or two contracts on YM with Global. But definitely no more than 2. Best to just stick with one with this small amount. It figures out to about a 10pt. stop loss you can risk on each intraday trade (2% on total account equity)

 

[dandxg]

For $2500 you can open an account with Pro Active Futures. Ask Truff here, we works for them. I have a backup account with them. It's using the TransAct Dome which is nice. Not all the features of Ninja Trader, but it doesn't cost $$$ and isn't .net based.

 

[ddunbar]

Quote from jimmygold:

Quote from ddunbar:

Well, first of all, there are not that many future's whose performance bonds are less than $3000. Sure, intraday margins tend to be at the 50% level with the occasional exception of a broker like Open-E-Cry who will let you day trade with $500 intraday. But that's only if you have $5k in the account. Or so I believe.




This is NOT correct. Iam with Global and trade Intra Day YM. I am starting out with just 2K. You can start out with only $500 total which is margin for intra day on one contract. But it is NOT advisable because you will not have wiggle room for potential maintenance call.

But $2500 is more than enough to get your feet wet in trading intraday on one or two contracts on YM with Global. But definitely no more than 2. Best to just stick with one with this small amount. It figures out to about a 10pt. stop loss you can risk on each intraday trade (2% on total account equity)

Sure what I said was correct. I never directly said anything about Global. I simply stated that there are not many brokerages who will let you trade for less than 50% intraday margin. But I left room for brokers like Global - they would fall under the occasional exception like OEC. That is of course, for small traders. Large traders can obtain favorable intraday and overnight margins at many of the big brokerages or if they lease a seat, can obtain favorable margins with their clearing agent.

And trading is not about getting your feet wet. Is owning your own small business given the high failure rate of small businesses about getting your feet wet in entrepreneurship?

To be sucessful in trading, as in any business, you invariably must be properly funded, have the mindset to suceed, and put in the necessary preparatory work. It's simply the low barrier to entry that gives new traders the thought that they can get by being underfunded.

I'm not saying sucess is impossible with such a small account. It can and has been done. But there aren't many wo have done it and the ones who did do it were either extremely talented or put in the necessary study, system design and prep work before opening their account. None of them, as far as I know, were seat-of-the-pants, off-the-cuff.

I'd like to see new traders suceed. But they always seem to get indignant over the hard facts of why most new traders fail. The markets are just too dogone enticing.

 

[volente_00]

$500 margin, on a $2500 account trading 1 contract using 2 point stops will give 19 losses before your account is down to $500. If you were to have 19 losers in a row, perhaps trading is not for you. The problem is most don't listen and start trading maxed margin from the start.

 

[dandxg]

Quote from dandxg:

For $2500 you can open an account with Pro Active Futures. Ask Truff here, we works for them. I have a backup account with them. It's using the TransAct Dome which is nice. Not all the features of Ninja Trader, but it doesn't cost $$$ and isn't .net based.

The above was supposed to read he works for them.

 

[Pippi436]

Quote from volente_00:

$500 margin, on a $2500 account trading 1 contract using 2 point stops will give 19 losses before your account is down to $500. If you were to have 19 losers in a row, perhaps trading is not for you. The problem is most don't listen and start trading maxed margin from the start.

I may be wrong, but i always thought in the US a margin account must have a minimum balance of 2000$, due to regulation?