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Trading futures with $5000
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Trading futures with $5000

  #51 (permalink)
Trading for Fun
San Diego California
 
Futures Experience: Intermediate
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When I first started with my 10k account just going straight into futures without any knowledge..... thinking I was good enough with my stock trading/ETF skills(Thought SPY and ES was exact same thing)....i was quickly down 2k. The amount of leverage and every tick was something I was not used to compared to trading ETF and option although technically the same thing.

Now I am jabbing in and out with a 5k account. Mainly trade Nikkei 225 mini overnight and I still jab on index futures during U.S. session.

It is hard psychologically even though I have great setups in terms of risk/reward.
What is hard is that even when you pretty much get in at the rock bottom levels, the ticks and the moves are so large in relation to your overall account size it does mess me with me psychologically and that is why I think I tend to be scared and cut my winners too fast. Overall I am somewhat happy I initially started with a small account because had I initially started with 50k or even 25k, I would keep thinking I can still come back and probably would have ran that to 0.

By having a small account there are pros and cons when I am initially starting out. My patience and discipline to wait for very high probability setups are SUPREMELY high. I lost the urge for marginal trades although they tend to play out in my direction. There is less margin for error and that has taught me the name of the game in which I try to mimic the pros in only waiting for high key setups and maybe trade 1-3 times max.

The con however is I keep looking at the P&L with too much emphasis since again the movement in relation to the account is so huge. I tend to be able to get in at amazing risk/reward levels but even in the initial entry, sometimes the market likes to tick around stops or trap people and that messes with me psychologically thinking oh, maybe I am wrong in the trade.

Anyways right now with my small account size I am still trying to get even to pay back my tuition by being disciplined and patient for high key setups. I need to get past the fear of market doing so and so, and accept the risk. Once I payback my tuition, then I will start adding more contracts but for now I am trading just 1 and it is sometimes a handicap since if I was trading 2, I could get out of 1 after it hits my initial target and hold the other for more.

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  #52 (permalink)
Risk--->0 $--->∞
Chicago, IL
 
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Platform: NT8,NT7,TWS,FOREX.COM app
Broker/Data: InteractiveBrokers, NinjaTrader Brokerage FOREX.COM, IQFeed
Favorite Futures: The one I'm creating in the present....ES, ZF, ZN, ZB, FX pairs
 
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emptymind View Post
When I first started with my 10k account just going straight into futures without any knowledge..... thinking I was good enough with my stock trading/ETF skills(Thought SPY and ES was exact same thing)....i was quickly down 2k. The amount of leverage and every tick was something I was not used to compared to trading ETF and option although technically the same thing.



Now I am jabbing in and out with a 5k account. Mainly trade Nikkei 225 mini overnight and I still jab on index futures during U.S. session.



It is hard psychologically even though I have great setups in terms of risk/reward.

What is hard is that even when you pretty much get in at the rock bottom levels, the ticks and the moves are so large in relation to your overall account size it does mess me with me psychologically and that is why I think I tend to be scared and cut my winners too fast. Overall I am somewhat happy I initially started with a small account because had I initially started with 50k or even 25k, I would keep thinking I can still come back and probably would have ran that to 0.



By having a small account there are pros and cons when I am initially starting out. My patience and discipline to wait for very high probability setups are SUPREMELY high. I lost the urge for marginal trades although they tend to play out in my direction. There is less margin for error and that has taught me the name of the game in which I try to mimic the pros in only waiting for high key setups and maybe trade 1-3 times max.



The con however is I keep looking at the P&L with too much emphasis since again the movement in relation to the account is so huge. I tend to be able to get in at amazing risk/reward levels but even in the initial entry, sometimes the market likes to tick around stops or trap people and that messes with me psychologically thinking oh, maybe I am wrong in the trade.



Anyways right now with my small account size I am still trying to get even to pay back my tuition by being disciplined and patient for high key setups. I need to get past the fear of market doing so and so, and accept the risk. Once I payback my tuition, then I will start adding more contracts but for now I am trading just 1 and it is sometimes a handicap since if I was trading 2, I could get out of 1 after it hits my initial target and hold the other for more.



Have you thought about M6E the e-micro Euro a CME product? $1.25 in Tick size/contract.

And there's FX as well where you are in control of the per pip dollar amount based on how much you trade. 1000=micro lot or $0.10/pip, 10,000=mini lot or $1.00/pip, 100,000=standard lot or $10.00/pip.

One very important aspects of this business is to live to trade another day. So you have the needed time to develop the necessary skills, habits and behaviors. Large accounts make this possible. So does trading instruments that don't cost a lot of risk per trade that's why I outlined what I did above.

How do you trade? What's your method? Contrary to popular belief I find Volume Profiling Forex works extremely well using minute data.

Below in EURUSD and Profiling volume back to Aug 25 2015 I targeted the other side of value and the market turning points also the value area low. On a micro lot you could've risked less than $30.00 with the stop up where the ruler on the first chart below starts and have targets at multiples of this risk. These charts are daily. Higher timeframe, higher probability trades, it's that simple.

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This trade and ones like it takes patience but most in his business like and want to be doing "stuff" all he time. Most in this business lose money so "stuff" means just that.

That first chart I originally post here in FIO https://futures.io/brokers-data-feeds/13731-fxcm-review-5.html#post595318

Ron


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It is an axiomatic fact that while you meditate you are speaking with your own spirit. In that state of mind you put certain questions to your spirit and the spirit answers: the light breaks forth and the reality is revealed.
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Buy Low And Sell High (read left to right or right to left....lol)
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  #53 (permalink)
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Seattle Wa usa
 
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If you cant make money with 5000 why would 25000 make a difference?

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  #54 (permalink)
Risk--->0 $--->∞
Chicago, IL
 
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Platform: NT8,NT7,TWS,FOREX.COM app
Broker/Data: InteractiveBrokers, NinjaTrader Brokerage FOREX.COM, IQFeed
Favorite Futures: The one I'm creating in the present....ES, ZF, ZN, ZB, FX pairs
 
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Richh View Post
If you cant make money with 5000 why would 25000 make a difference?


Offering an answer......

I have a large account. I can withstand big drawdowns and still keep going, remain in business. These things happen in this business. It's the nature of the beast.

A drawdown can easily be $5k. Having $20k to still trade means you have an opportunity to create new revenue.

Having just $5k, well you get it. Yes you would (hopefully) trade smaller and better suited instruments but these type account blow outs happen a lot in this business.

The probability mind set needs to be fully ingrained into the psyche of a trader so they don't go messing and changing everything once these drawdowns happen.

Many problems come from traders not having sound business ideals regarding trading.

Ron


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It is an axiomatic fact that while you meditate you are speaking with your own spirit. In that state of mind you put certain questions to your spirit and the spirit answers: the light breaks forth and the reality is revealed.
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
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  #55 (permalink)
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Richh View Post
If you cant make money with 5000 why would 25000 make a difference?

Because there is no guarantee that you can make money with $5000. You are more likely to lose. It is better to have enough capital available to survive a draw down or your initial learning phase and then still be able to be in the market to capitalize on an opportunity.

Trying to shoestring trading will only leave you broke and unable to actually trade. There are more profitable ways to invest $5000 then trying to day trade with it.

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  #56 (permalink)
Market Wizard
Blacksburg, Virginia
 
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tturner86 View Post
Because there is no guarantee that you can make money with $5000. You are more likely to lose. It is better to have enough capital available to survive a draw down or your initial learning phase and then still be able to be in the market to capitalize on an opportunity.

Trying to shoestring trading will only leave you broke and unable to actually trade. There are more profitable ways to invest $5000 then trying to day trade with it.

Agree with @tturner86. My 2cents: trading is a business and just like a business you need sufficient capital to weather the start up period before you become a constant earner and the inevitable drawdowns. Its like a coffee shop or pizza business, it might take a year or two before it's established and becomes a neighbor favorite so the owners need enough money to keep the lights on before they break even....or like most small businesses they go bust sooner then later..

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