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What's a good ballpark figure for initial account funding under these conditions:
• trading ES mini, intra-day
• taking loss at around 2 points, with cutoff at 4
• making up to 8-12 round trip trades
• trading single contract
Also, suppose the strategy is profitable, at what point (in account balance terms) would you feel comfortable/margin requirements would allow adding another contract to the mix (trading 2 contracts)?
Can you help answer these questions from other members on NexusFi?
1. Have you ever traded live before? Based on these questions I am guessing no.
2. Depends on trader experience and which broker you choose. Some have a $500 intra day margin others make you pay the full price.
Asking other people what they would do won't answer these questions for you. My risk tolerance can be way different than yours.
Please, take it from someone whose been there. If you have never traded live before, start with the micros before you ever tackle the minis. It will be time well spent. $5 a point hurts far less than 50. It will allow you to focus on the trading and not so much on the money which will go a long way to long term success.
Thanks for writing Apologies for insufficient context but what I am looking for is indeed ballpark figures. Just to get some idea.
I'm a trader with 9 years experience (primarily FX) and I agree with you entirely in regards to the psychological aspect of the craft. I've chosen to expand my operation into futures market, as such the specific technical nuances of it are somewhat novel to me.
The broker I'm considering has $500 intra-day margin on ES. As for the risk profile, while understandably this is highly subjective, I've included my 2-4 point stop loss for that particular reason. I can additionally clarify that my target would be in a 4-5 point range, although often I find myself taking profits early (in strategy testing).
I remember reading/hearing an interview with Michael Patak at Topstep Trader explaining their account structure fr their financing tests. The account they call a $30,000 account allows a maximum of three contracts to be traded, the $50,000, 5 contracts. That's because they believe people should trade one contract only for each $10,000 in their account.
I have read others say the same thing as it means it would take time to blow up your account and you won't have any chance of making money in the long term if your account is so small you blow out and have to give up very soon after starting because you are out of margin. Psychologically it is also easier to lose $200 in a day on a larger account where it is a smaller percentage of the total. On a small account fear of loss increases. The trouble is people see that the broker only requires a $500 margin so they only a tiny account and it is all over before they have even started.
(But one also has to be careful if funding a decent size account of the problem of self discipline. If a person has a couple of good trading days and then increase their size, or they have a drawdown and increase size to make it back and then quickly lose much more than they intended. They again end up trading an under capitalised larger account, because they are trading more size (just till they get back to breakeven)).
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
You should start trading with whatever you can start trading with. Don’t wait until you save up a specific amount of money, just get in there and start trading right away, because there’s no better experience than actually getting in there and doing it. You want to start doing that as soon as possible.
Very individual and strategy subjective question. For example if you have considered position management, amount for one lot is hardly enough. If you have not then I strongly suggest to test your strategies in that regard and then decide as to what pool of money is needed to pull off those markers.
Also, if you have not traded live yet then I agree with what is previously said, start with micro. Hastiness here can result in blowing up your account, most people have blown at least one if not more of their first trading accounts, including me. One of the main reasons for that is stressing on "how much minimum for me to be able trade" and not considering "how much exactly I need to execute my strategies as intended".
Apologies for insufficient 
