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hello everyone just a newbie with a few questions :)
Hello everyone i'm currently futures trading on paper money, and studying for about 4-6 hours a day.
I'm very excited about getting into live trading, and am in the process of developing a plan. I originally thought about putting in about 5-6 thousand dollars into an account and attempt /es on live market, but couldn't get over the huge amount of leverage. i am prepared to lose all of the 5 to 6 thousand dollars, but the idea of a huge debt from noob mistakes turns me away. I've been coming out positive 200-300$ at the end of my days trading 1 contract at a time (i usually trade in the mornings 3-4 days a week for the past couple months) but read about how different paper trading is from live, and again do not want to risk losing everything.
I rethought my plan into using a different instrument with a less risk to continue learning as i save more money/make small wins with my "education." My problem is i do not really no what other instruments i should begin practicing and looking more into. Is there anyone out there with some suggestions.
i also practice/study while i'm at work. (i work at an internet cafe for a decent wage, and find myself in a empty room full of high powered gaming computers for 4-5 hours so day trading and still keeping my full time job is very much an options.)
other than that thanks for the read and im glad i found this forum.
If you trained yourself with ES on paper for a long period, then i would not immediately abandon and jump on another instrument, that will be a setback of several months. Try to manage your risk and progress with the ES. The instrument is liquid and if your technique/edge/plan is solid, there is plenty room to make money.
What does your typical stop look like ?
Good money management would be 2% per trade, that's something like 10 ticks.. on one contract ..
As @rleplae said the concentration on one instrument only is the best.
That needs some time to "feel" the movements and eventually the extremes.
The instrument should be very liquid and best is to have the main trading time
when you can be regularly online.
Maybe follow the opposite instrument that works in the opposite direction of
the main one. Like Dax and EURUSD as example.
I currently use macd, double bollingers and SMA on a daily chart and a 5day chart.
stop out at 3 ticks below entry (i like to enter at low swings below sma when the market is trending up) and try to close out 6 ticks above (unless i can see a break out coming on both the 1 day and 5 day chart or the bands are clearly expanding). i set my stop to avoid changing trend or a bearish break out i didn't see. my strategy seems super sloppy now that i read it haha. i apologize for my ignorance i am still learning and don't plan on trading live until i am confident with my practice. i've just read many stories of beginning traders getting massive amounts on debt trading on leverage and got spooked.
I might suggest that the inputs you are using for your evaluation (MACD's, and SMA's) are lagging sufficiently that they won't give you the level of detail you need in order to precisely find a trade that will fit those risk parameters (3 stop, 6 take profit). It's like saying you're playing black jack, and a new card has already been dealt to you, but you can only bet on information that's been given to you 1 or 2 cards ago.
That type of system might work for say an hourly chart where your stops are say 25 ticks and targets are 50-100 ticks.
It might benefit you to look at a level 2 depth of market, the time and sales, and maybe foot print charts in order to get you the level of detail needed for your trades.
Finally, it seems like your getting yours setups from a trade book. I would highly caution against those systems. They might have worked at one time, but they don't work in the current modern markets.
If you want to focus on ES with a small account, you should develop a trading plan that keeps you out frequently, a plan that gets you in on trend days like March 24, March 29, and April 1, but keeps you out on range days.
Thanks again for everyone giving me some direction.
Level 2 and timas and sales shall be my focus for today but sadly the dom, level 2, and times and sales on tos sim dont match. Im assuming it will after i fund my account though. So do you guys think i should just continue with my es practice even with a sub 10k account to start? With good risk management and just one contract at a time is it still possible i can fall into debt.
TD Ameritrade uses a heavily filtered feed, so you'll be missing data. I also don't think they offer foot print, but i could be wrong. Might want to hunt down a good credit rated broker that subsides free tick data. (Dont' take this as a knock against ThinkorSwim though, I still hold accounts with them, just not day trade accounts)
I highly, highly recommend trying to get to about $25k-$50k of capitalization before trying to trade futures contract. You really need to be able to trade 2-3 contracts. While you're trying to do that, you can have plenty of time practicing "reading the tape" so to say.
I would not "practice" with live money. Practice the mechanics of entry and risk management using paper money, and when you feel the risk management has become mechanical, and you feel can see where the market is going, then put some live money behind it. Take the $25k-$50k account and risk only 1% of it before you enforce your risk management mechanics that you can honed during practice.
I don't know TOS' margin requirements or whether or not they automatically liquidate positions you can't afford to hold anymore, but I think what's more likely is that commissions and a string of papercut losers will keep you from having enough intraday margin to continue trading.
As MacroNinja points out, in all honesty, you're a bit undercapitalized.
i am still learning and don't plan on trading live until i am confident with my practice. i've just read many stories of beginning traders getting massive amounts on debt trading on leverage and got spooked.