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Psychology and Money Management

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New to Futures, but Hitting the Wall

  #48 (permalink)

Las Vegas, NV
Trading Experience: Intermediate
Platform: NT 8
Broker/Data: NT Brokerage, IQFeed
Favorite Futures: ES, 6E & CL
Posts: 17 since Aug 2013
Thanks: 2 given, 10 received

UnderCapitalized in my opinion

Hello Wizard3ootz, I think the biggest problem you have right now is being under capitalized,
when I see statements like:

1) "So, it's probably my third week trading futures (day trading)..." (2-3 weeks in? Of course you'll lose $$!!
Any other outcome would be extremely rare.)

2) "Mostly, though, it's perhaps overtrading..." (You know a major mistake you're making, STOP!!)

3) "I know I need to lower my position sizes..." (You know a major mistake you're making, STOP!!)

4) I had considered walking away, and taking my money off the table (I'm down about 1300).
($1300 net change whether profit or loss is nothing for 2-3 weeks of day trading.
I'm not trying to be a jerk here but the fact that you're talking about walking away after losing
$1300 in your 1st 2-3 weeks is a blatantly obvious flag that you are under capitalized, to me at least.)

5) Do you mind if I ask how much you pay for commissions?
I pay ES = $1.89 (10 to 20% of trades)
CL = $2.21 (80 to 90% of trades)
(All in rates NT8 lifetime license).
I ask because I don't find commissions to be that much of a burden.
Letting profits run and cutting losses, RIGHT?

6) If my full position is 10 contracts, here's a method I use to limit commissions.
On my buy/sell signal I trade 1 contract. If it stops me out I lose on 1 contract.
If it goes my way, I add more. If it goes my direction and I add more, I profit on
several contracts up to my max of 10. I limit my losses on whipsaws and false breakouts to 1 contract
and maximize my profits on up to 10 contracts during genuine vertical moves.

I haven't seen your trade strategy or methods and I'm not asking to. What I'm suggesting is that it is definitely
POSSIBLE that your current strategy could be profitable (Or maybe not) when you are properly capitalized for
the number of contracts you trade. Most suggest 1-3% and if aggressive go as high as 5% of your portfolio for day
trading futures.
My "portfolio" is a much higher % of day trading futures and I accept that degree of risk.

Losing $1300 in 2-3 weeks while day trading more than 1 contract is the same as
breaking even IMHO.
If that same $1300 in your 1st 2-3 weeks is enough to run you out of the business,
then YES you are definitely under capitalized by anybody's definition.

Until you remedy this situation, no method will be profitable IMHO.

I wish you better luck moving forward and
I sincerely hope I helped at all, JM

P.S. 1st) sim account, 2nd) micro contracts, 3rd) futures contracts

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