The Time Has Come !

S

saxon22

After studying "IT" for a little bit over a year, I have finally decided to wet my feet in "real water" and next week is my last one trading on the sim. I have decided to deposit 6K into a trading account and begin my education - Level II chapter. This is my tuition and I am willing to "donate it" to the market, hoping that this "entrance fee" will allow me to get better at trading and sharpen necessary skills to defeat "the futures Monster". Consequently, if all of the 6K disappears, I will not jump off the bridge or go insane and run naked through my neighborhood. I feel that I have hit the wall with the sim and in order for me to improve I need to start doing it for real. I will only trade 1 ES contract and will exit the market after reaching - $100 per trade or - $500 a day limit.

So MY QUESTION IS:

Provided my system works and I stay profitable and devote another year to be able to get to a position where I could comfortably and profitably trade anywhere from 20 to 50 ES contracts. How much money should I have in my account to be able to accomplish it? I gathered from the articles and books I have read that I should not risk more than 5% of my total amount. What do you guys feel should the amount be?




Disclaimer: I am not going to exercise the above scenario until I am profitable for a minimum of 1 year (trading 1 then 2, then 3, then 5 contracts profitably) and 100% comfortable placing 20 contracts at the time.


saxon22
 
Quote from showyouwang:

Um, placing 50 contracts in ES requires A LOT of capital risk-wise.
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This is precisely what I am trying to find out, namely; How much is enough according to people frequenting ET.
 
You're jumping the gun a bit, thinking out too far ahead, IMO. Concentrate on becoming profitable with that 1 contract, THEN add more. Don't put the cart before the horse.

But just for fun, let's look at the numbers. Assuming a $500 margin per contract, you're gonna need $25k to trade those 50 contracts. And if you want to only expose 5% of your funds per trade, you're gonna need $500k to do that.

What R/R are you using?
 
Quote from traderdon56:

You're jumping the gun a bit, thinking out too far ahead, IMO. Concentrate on becoming profitable with that 1 contract, THEN add more. Don't put the cart before the horse.

But just for fun, let's look at the numbers. Assuming a $500 margin per contract, you're gonna need $25k to trade those 50 contracts. And if you want to only expose 5% of your funds per trade, you're gonna need $500k to do that.

What R/R are you using?
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You are right, but I need to stay motivated and "jumping the gun" like this helps me stay focused. I guess, this is howI keep my eyes on the prize. You are 110% right that first and foremost I must become profitable with 1 contract for a long period of time. However, assuming I can achieve that, in order to play in the major leagues, I need capital and plenty of it. In order to be ready to load my weapon in the future, I need to amass ammunition asap. Saving 200K or more is not easy and time consuming. Therefore, the accumulation of necessary capital must start way before in order to have enough when the time comes. The question is how much??????
 
Quote from Tums:

The Trading Game: Playing by the Numbers to Make Millions
by Ryan Jones
http://www.amazon.com/Trading-Game-...5025538?ie=UTF8&s=books&qid=1174233395&sr=8-1

Trade Your Way to Financial Freedom
by Van K. Tharp
http://www.amazon.com/Trade-Your-Wa...5025538?ie=UTF8&s=books&qid=1174233450&sr=1-1

Portfolio Management Formulas : Mathematical Trading Methods for the Futures, Options, and Stock Markets
by Ralph Vince
http://www.amazon.com/Portfolio-Man...6233710-5025538?ie=UTF8&qid=1174233395&sr=8-1
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Thank you for the reading material. As a matter of fact, I was loking for some new publications to devour. However, I would like to get some personal answers based on trading experience from the ET crowd.
 
How many trades a day do you imagine doing?
Quote from saxon22:

You are right, but I need to stay motivated and "jumping the gun" like this helps me stay focused. I guess, this is howI keep my eyes on the prize. You are 110% right that first and foremost I must become profitable with 1 contract for a long period of time. However, assuming I can achieve that, in order to play in the major leagues, I need capital and plenty of it. In order to be ready to load my weapon in the future, I need to amass ammunition asap. Saving 200K or more is not easy and time consuming. Therefore, the accumulation of necessary capital must start way before in order to have enough when the time comes. The question is how much??????
More...
 
My own criteria is $2500 for each contract traded. You can do it for as little as $500 per but I think this is foolish. I plan to add one contract each time $2500 is added to my account. After a year of trading I feel comfortable with this.
 
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