I've been following the stock market and trading for the past 7 months. At first I was trading individual stocks, but eventually I settled on trading the SPY because it meant less stocks to follow.
The thing is that the SPY ETF is around $200 a share. If I buy 100 shares, I can make potentially $100-400 per trade while risking $20,000 in capital. I used to trade options but the volatility nowadays is too high to buy options. There's also the uncertainty at the moment which means options can expire worthless.
Is there a better way to trade the S&P 500 Index in terms of reducing the amount of capital required?
Also please share your good trading practices. Should I always have a trailing stop loss attached for all my positions? etc etc.
But leverage is the enemy of any beginner/rookie. You should stick with ETF's until you have a prove track record of long term consistent profits before you consider moving to futures.
On futures.io (formerly BMT), nearly everyone is trading futures. Nearly everyone also loses money and would be better off trading ETF's.
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With $7-8k forget about day trading ETFs in the US; PDT rules prevent that.
And futures? Suppose you choose a 1% stop - 70-80$. Or 2% - 140-160$.
What will you get for this? Scalping to rub your nose with HFT systems that
rip n00bs faster than you can push a button?
You asked about returns. That's not the point: the point is risk.
There's simply no cushion and thus no room for mistakes with your account size.
And you will make mistakes ...
In sum: Pardon, but (day) trading with these restrictions is setup to fail.
So you better look for position or swing trades and put money aside until you can afford
The following user says Thank You to choke35 for this post:
Thanks for the reply Choke. FYI I wasn't asking about returns, or anything for that matter. I was just replying to another post. I know that I have a set amount of money and am interested in trading with it. If day trading isn't an option, then that's fine, but I am sure that there are other things that can be traded as well, even if not on a daily basis. Again, thanks for the reply.
The following user says Thank You to PhillyMack for this post: