Trading e-minis with $1k starting capital

Quote from austinp:

<i>"ER2 is my favorite stock index instrument. But I gotta tell you, it has reduced me to tears so many times in the past, trying to trade this animal with less than $2,000, that I finally smartened up."</i>

Once upon a time the ER was pure gravy to trade. Smooth, wide swings and trendy in nature. That lasted for a few years, but it's changed dramatically of late.

Yesterday and especially today I saw the bid/ask spread a steady two-ticks wide... sometimes three ticks wide in the first hour of trading. Bid 698.10 ~ ask 698.30 and would trade next fill at 698.40 or 698.60

Also made a number of 1 index point ~ 2 index point whipsaws counter to the overall direction it was heading. Size on the dome is 1/2 to 1/3 what it was mid-year 2007. Hence the illiquidity and issues that follow.

I'd be surprised if there are 10 people total in this entire forum who have turned more ER2 contracts than I have since 2004. Trust me when I say it is a very different animal now than before, and much more difficult to trade for everybody.

I'd opine that a majority of former retail traders in ER either blew out and quit when volatility ramped, switched to other markets or some combination of both. Migration to ICE and uncertainty of its future also plays a role.

**

In a perfect world the ER could handle 20-lots or bigger, keep a tight 1-tick bid/ask spread and limit the counter-move spikes and whips to a minimum. Give us that and it'd be no problem to average +50pts to +80pts ER monthly ten out of twelve times per year.

About two ER sessions on average per week now are still gravy... but the other two - three are just like today. Sketchy to brutal.

This applies to all systems, methods and approachs in ER without exception. No one or nothing is immune to widened spreads, erratic movement and rogue spikes knocking out stops every which way. The days of stepping into ER and knocking it out of the park every session are, I'm afraid, over with. The dome and charts do not lie.

As for the ES, it was only choppy midday. The first hour and final hour were pretty clear trading, as I imagine the YM and NQ were too. The only symbol with real liquidity = erratic behavior issues right now is ER. Very good advice for small accounts to work the NQ or YM instead.
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You are right, austinp. It seems I can make decent money trading ER couple of days per week but the rest of the days are usually a disaster. Why didn't I realize this sooner?
 
Hi IS,

I know that I said goodbye, but this is just too painful to watch.

I said much earlier in this thread that whether you realize it or not you are offering yourself the luxury of having no losing days.

Obviously that one fell upon deaf or dumb ears.

Osorico offered up ....

1 ... protect your capital
2 ... grow your account.

He represents the voice of sanity.

I imagine that you have fallen into the chartist´s trap of falling in love with your own entry signal while ignoring the other 99% of trading that really counts.

My advice to you is start thinking like a trader and stop behaving like an analyst.

If you think that this is harsh, then you should have served under my rugby coach.

"Embrace the joys of the noble sport after you have won" he said.
"If the opposition are tough, then lay down your life and be tougher, he said.
If the opposition are weak, then hammer them so that all will remember, But above all, never ever give me less than 110%"

110% is way beyond 6 on your scale IS.

regards
f9
 
Quote from fearless9:

Hi IS,

I know that I said goodbye, but this is just too painful to watch.

I said much earlier in this thread that whether you realize it or not you are offering yourself the luxury of having no losing days.

Obviously that one fell upon deaf or dumb ears.

Osorico offered up ....

1 ... protect your capital
2 ... grow your account.

He represents the voice of sanity.

I imagine that you have fallen into the chartist´s trap of falling in love with your own entry signal while ignoring the other 99% of trading that really counts.

My advice to you is start thinking like a trader and stop behaving like an analyst.

If you think that this is harsh, then you should have served under my rugby coach.

"Embrace the joys of the noble sport after you have won" he said.
"If the opposition are tough, then lay down your life and be tougher, he said.
If the opposition are weak, then hammer them so that all will remember, But above all, never ever give me less than 110%"

110% is way beyond 6 on your scale IS.

regards
f9
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Very good point, f9. I admit I have some serious psychology issues I need to resolve, if I want to succeed.
 
Finally a decent day. Traded much less, took only perfect setups, no impulse trading today. All ER2 trades were made in premarket. I'm finishing early in order to book much needed gains.

Products traded: ES, ER2
Contracts: 29
Opening balance: 829
Closing balance: 1121
Net P/L: 292
Discipline: 5
 
Quote from IndexScalper:

Very good point, f9. I admit I have some serious psychology issues I need to resolve, if I want to succeed.
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Hi IS,

Dont try to take the whole trading thing too seriously, but rather just relax back into it.
Easier said than done I know.

Bear in mind that the bulk of the business is done by a small number of stations and that the person on your other side is statistically a big player.

This does not mean that one of you is right/wrong. You will never know what the other side is up to.
It simply means that one of you is buying and the other is offloading.

Train yourself to think in terms of risk and accumulation.
Always put risk first since there are ample opportunities to enter the market each day, but each is attended with it´s own risk.
You take only the trades within your risk limit and not a single tic more.

regards
f9
 
In other words, if you traditionally hunt deer and then you decide to hunt lion, your risk model will need some keen adjustment before you start.

regards
f9
 
I was considering doing the same this as IS. I'm thinking about starting off with about $1K and seeing if I can build from there. The only difference is that I am looking into building some automated systems in tradestation to actually execute my strategies. This will eliminate my impulse trades and emotions. I really do think it is possible to turn $1K into a large amount with futures, but I know from past experiences it is very hard.
 
Quote from fearless9:

In other words, if you traditionally hunt deer and then you decide to hunt lion, your risk model will need some keen adjustment before you start.

regards
f9
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.

Now that was an excellent analogy!!!
 
Quote from IndexScalper:

Sorry, I can't answer that for obvious reasons.
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I understand once you disclouse them /entries/ the general
public/ big funds included/ will step right in and start using them
which in turn will make them stop from being productive?
I hope you've noticed that even you dont follow them religiuously
yourself/giving yourself low notes on discipline/ and you assume
the general public will.. funny..but hey, maybe I'm wrong and
there are other 'obvious' reasons? :confused:
 
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