What would you consider the minimum Account Balance to trade Commodity Futures?

[tango29]

Day trading, swing, position, which futures? All can help make the decision as to what you need, as well as spread trading, or longer term diversified trading make a difference.
When I was at IB I kept $75,000 to $100,000 in my account and that was mostly for daytrading ES, NQ, RY, and occassional swing on bonds. Now I keep between $25,000, and $50000 with current broker.

 

[Laissez Faire]

The fact that you have to ask probably means that you need more than you have at hand.

 

[RedSun]

This is extremely hard to say. If you start with 5 winning days in a row, you can double the value of your account. Or you can lose all your capital in a week.

If you do not mind trading mini or micro contracts, you can start with $5k. If you trade most of the full commodity futures contracts, you need at least $10k for each contract. Some of the margins may have gone up more and you may need more.

So to start, I'd recommend from $10k to $50k to start. You never want to be under capitalized.

 

[zghorner]

It dependson the trader. Education, skill level, risk tolerance, discipline, etc. There are plenty of free educational resources to start learning how to trade futures. Micro futures are making it more accessible for traders with less capital. You can start learning on a simulator affordably.

Generally, it seems the challenging part about trading small accounts(<$5,000) is the psychological impact created from leveraged drawdowns. I’ve known several futures brokers to say they wouldn’t try with less than $25,000. Probably for psychological reasons, butit depends. The correct answer depends on you.

again surprised...i was expecting $100k-$250k to be minimum. Thanks for the reply.

 

[zghorner]

The fact that you have to ask probably means that you need more than you have at hand.

depends on who you ask looks like lol.

 

[Laissez Faire]

Bruce Kovner took out $3K on a credit card to get started trading commodities in 1977. Find out the equivalent of $3K today and you have your answer.

Kovner's first trade was in 1977 for $3,000, borrowed against his MasterCard, in soybeanfutures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling.[13] He later claimed that this first, nerve-racking trade taught him the importance of risk management.

 

[Concinnity]

5k for trading 1-3 micro's is actually pretty substantial sized account if you have an actual trading edge and plan on intra-day trading.

If you're just going to throw on positions, average down, have no edge and still want to make money than you probably need 30-50k and hope we have no Covid type moves that take you out.

 

[Overnight]

again surprised...i was expecting $100k-$250k to be minimum. Thanks for the reply.

That is a safe amount to trade 1 mini for swinging, but for day-trading you can get away with a lot less, and it depends most severely on the instrument you are trading, as the performance bond requirements vary greatly between instruments. For example, the meats and grains have much less requirement than precious metals.

There's a journal on here with a guy trading with a 300K account on the equivalent of anywhere from 1 to 6 equity minis through the micros, and has been having some rough swings. Rai27 I think is nick? Anyways, look through it.

 

[RedSun]

Anyone can have successful "story" trading futures, with little capital or borrowing from credit card. The question is if this someone can successfully do this over many years.

I had a 76% monthly return sometime last year on CL. If OP had such a good start, then he would be golden. But OP can certainly lost all gains and more. Futures trading is not good for everyone.

I do not trade big positions with futures. The main thing is that I do not like the markets that open pretty much 24 hours/day. We need good rest.

 

[Bugsy]

Looking more for education than personal advice. I have always had an interest in commodities...but this market is intimidating lol. They do seem more simple and appealing than options: no theta, ruled primarily by supply & demand, taxed slightly better, etc...

so just for the sake of conversation, how much money would one need to comfortably get started trading commodity futures?

Do they have to be commodity futures? Why not index futures. Also, you can get away with trading a far smaller amount now with micro contracts. $5,000 with a single micro ES contract cost you all of $50 on a 10 point drop. At only a $1 round trip contract fee this is very doable for a tiny account. $5,000 gives you a 1,000 point cushion to play with at only $5 a point.