start with 1 futures contract like ES or ER2. make your account size the minimum to trade that contract. Tradestation and IB min account open size is 5k, so put in only that amount until you are consistently profitable. What happens is most new traders (me included) see the leverage possible w/ futures, and really go nuts. You lose a little money, and then think, if I double or triple up my position size, I'll make it back and then some. Of course, the market moves against you, and you take a major hit.
The start of the plan for S&P
- Thread starter Allen3
- Start date
<i>"I know I have to get my mind right about things, but is your advice that your financial situation doesn't come into play."</i>
If a trader doesn't have a defined edge to win AND the self-confidence to hold themselves accountable (disciplined) to it, starting balance account size is totally irrelevant.
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On a scale of 0 to 100, each new trader starts with exactly 0 degree of geniune self-confidence. Don't mistake hopes & prayers for solid confidence which comes from experiencing positive results = reinforcement.
Trader starts with $100,000 initial balance, trades one (1) emini contract of any symbol. If the foundation of correct entry, stop management, trade exit and overall emotional management isn't already established as a base to build from, the results will be absolute.
That account will go from 100k to 99.5k to 99k to 97k to 94k to 89k to......
Get the picture? It does not matter what the initial balance is or how important that money is today. When first trading, learning the ropes and making all usual mistakes, mental score is tallied. If the feedback is losing -$50 here and -$100 there over and over again, what is established in the conscience?
<i>"I can't do this, I can't win, it's too hard, I need to add size, I need to pull stops, I need to average down and hope price action will turn..."</i>
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Listen to Gnome. He gives excellent advice. Paper trading is a critical first step to trading. Placing any $$ amount at risk without inner confidence that you can at least make money in demo mode will create anxiety, doubt, fear, anger, etc. There is no such thing as losing money = increased confidence when trading.
Start off on the correct foot, in demo mode. Starting with real money of any size will not teach anything but bad habits and negative affirmations. Make the usual newbie mistakes with demo bucks... there are plenty more lessons to be learned down the road when real money time truly does arrive.
If a trader doesn't have a defined edge to win AND the self-confidence to hold themselves accountable (disciplined) to it, starting balance account size is totally irrelevant.
*
On a scale of 0 to 100, each new trader starts with exactly 0 degree of geniune self-confidence. Don't mistake hopes & prayers for solid confidence which comes from experiencing positive results = reinforcement.
Trader starts with $100,000 initial balance, trades one (1) emini contract of any symbol. If the foundation of correct entry, stop management, trade exit and overall emotional management isn't already established as a base to build from, the results will be absolute.
That account will go from 100k to 99.5k to 99k to 97k to 94k to 89k to......
Get the picture? It does not matter what the initial balance is or how important that money is today. When first trading, learning the ropes and making all usual mistakes, mental score is tallied. If the feedback is losing -$50 here and -$100 there over and over again, what is established in the conscience?
<i>"I can't do this, I can't win, it's too hard, I need to add size, I need to pull stops, I need to average down and hope price action will turn..."</i>
**
Listen to Gnome. He gives excellent advice. Paper trading is a critical first step to trading. Placing any $$ amount at risk without inner confidence that you can at least make money in demo mode will create anxiety, doubt, fear, anger, etc. There is no such thing as losing money = increased confidence when trading.
Start off on the correct foot, in demo mode. Starting with real money of any size will not teach anything but bad habits and negative affirmations. Make the usual newbie mistakes with demo bucks... there are plenty more lessons to be learned down the road when real money time truly does arrive.
Polish your edge/method to death on a demo and I mean it ... to death. Then 1 contract at the time for at least 3 months, and then if you are consistenly profitable..... it should get easier (the operative word being should).
Also pay close attention to big heads on ET like Gnome and AustinP among others. They KNOW what they are talking about and are patient with all kinds of inquiries even the silly ones (ASK ME HOW i KNOW). Good luck!
Also pay close attention to big heads on ET like Gnome and AustinP among others. They KNOW what they are talking about and are patient with all kinds of inquiries even the silly ones (ASK ME HOW i KNOW). Good luck!
Paper trading is simply not the real thing. It is like playing war with fake bullets, turning on a John Madden video game instead of lining up at the line of scrimmage, and sitting on a flight simulator instead of actually flying a real plane. Paper trading may look like real trading, but it simply is not. The overall experience is not comparable, and, with paper trading, neither are the fills.
I am surprised this is not obvious. But what did Voltaire say about common sense?
Does that mean that one should go out with 100K or more (or less) and just start trading, hoping that one will gain knowledge of the markets by losing? Of course not. I recommend that new traders start laughably small, and that they expect to lose. With losing comes experience, along with some lessons. All traders lose, and sometimes it is because they made mistakes while trading. The wise ones learn from their mistakes. To them losses represent tuition, and there are no traders on scholarship in this sport!
Before one puts real money on the line in any business, one should spend months, at the least, actually knowing the business inside and out. I started out with buying 100 shares of Best Buy at 16 1/4 December 27, 1996, and that was after two full years of learning. I spent hours at a microfilm machine copying charts at a university library (when I got bored working on my dissertation) and checking hundreds of books out (and reading them) on all aspects of trading. And that was before I risked one dollar.
Preparation, backtesting, more preparation, and more backtesting will show you what works and what does not. Paper trading will help get critical knowledge, but it will do little to help create the emotional balance that one needs to be a successful trader. There is nothing like having real money that represents real freedom on the line.
By preparing BEFORE trading, one will gain that confidence. Relying too much on paper trading will give you false confidence, and who needs that? I have some of that in my refrigerator, in a twelve-ounce can!
Good luck.
I am surprised this is not obvious. But what did Voltaire say about common sense?
Does that mean that one should go out with 100K or more (or less) and just start trading, hoping that one will gain knowledge of the markets by losing? Of course not. I recommend that new traders start laughably small, and that they expect to lose. With losing comes experience, along with some lessons. All traders lose, and sometimes it is because they made mistakes while trading. The wise ones learn from their mistakes. To them losses represent tuition, and there are no traders on scholarship in this sport!
Before one puts real money on the line in any business, one should spend months, at the least, actually knowing the business inside and out. I started out with buying 100 shares of Best Buy at 16 1/4 December 27, 1996, and that was after two full years of learning. I spent hours at a microfilm machine copying charts at a university library (when I got bored working on my dissertation) and checking hundreds of books out (and reading them) on all aspects of trading. And that was before I risked one dollar.
Preparation, backtesting, more preparation, and more backtesting will show you what works and what does not. Paper trading will help get critical knowledge, but it will do little to help create the emotional balance that one needs to be a successful trader. There is nothing like having real money that represents real freedom on the line.
By preparing BEFORE trading, one will gain that confidence. Relying too much on paper trading will give you false confidence, and who needs that? I have some of that in my refrigerator, in a twelve-ounce can!
Good luck.
It sounds like the beginnings for most, at least thus far, were humble. Nobody started from the position of power so to speak by having ample money.
Thanks SAXON. Your antics in the ES thread led me to ask where everyone else started out and how much risk is proper. I just couldn't comprehend what you were doing and apparently now you don't either. It's good to hear. I was starting to worry it is all just a coin flip and all the prep I'm attempting and things I'm trying to learn are in vain.
I'll try to begin. It will be humble, but hopefully it will allow me to stay around for the long hall. Thanks again.
JIM
Thanks SAXON. Your antics in the ES thread led me to ask where everyone else started out and how much risk is proper. I just couldn't comprehend what you were doing and apparently now you don't either. It's good to hear. I was starting to worry it is all just a coin flip and all the prep I'm attempting and things I'm trying to learn are in vain.
I'll try to begin. It will be humble, but hopefully it will allow me to stay around for the long hall. Thanks again.
JIM
We all have our journeys to profitability, mine was (still is) a little bit convoluted. I think my "1/4 point on ES Can it be done Part I and II" is a testimony to a lost trading soul looking for a passage to making a system and failing. Lesson well learned and money well saved on this one thanx to those who showed me the light. (my hat goes to AustinP among many others).
Good luck and I recommend ES Journal. Most of the guys posting there are A+ people and have shown lot of heart to newbs like us.
Cheers and Happy trading mate!