IMO set a max drawdown rule of say 20% and if you hit it, then take a break for a month or two till you are confident it won't happen again. I didn't stop till I blew 50% of my account. 6 months latter and I'm still working on getting it back.
Thanks for answering. That level of draw down is way, way too big for your account size. Especially, even more so, on an unproven method and for a novice trader.
I hope you will stop trading before your account is gone. You need to learn a great deal more first.
Look, I understand you may think I am wrong. But hopefully you will listen to me. If not, hey - it's only money. If you do continue to trade, I hope you'll continue posting as well. It may help others. And if you decide to stop trading for a while, then I hope to see you in other sections of the forum asking questions.
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That level of draw down is way, way too big for your account size. Especially, even more so, on an unproven method and for a novice trader.
Actually I made $350 profit on that day but commission cost kills me so I will have to do some tuning to reduce
commission cost. I think my PL should include commision cost because that is the actual amount I give out or take in.
I'm sorry if I am asking stupid question. If I got you correctly you are trading 50 lots. If so your margin then $25K since most of the broker are charging about $500.00 per lot.
How can u trade 50 lots with $20K account.
Yes, same thought went through my head. Some brokers are 400.00 per lot but he just broke that with his drawdown and they would be closing him out.
Part of me thinks this is a hoax to get people's panties bunched. Either this person has balls of steel or he is getting a good laugh and we are wasting our time.
I hope he continues to post, but I want to see the whole enchilada of P&L for his account. He really likes giving money away and he seems to be OK with it. An attribute that would make him successful in business, but terrible in trading.
I wish him the best, but this is a train-wreck in the making and I almost can't watch any longer.
That's not scalping dude, that's randomly placing orders
And as Mike said, if you hit a trend with that method you're screwed (and you hit a big one there).
If this is real, $1800 is not bad. When I daytraded in college with stocks 15 years ago (1993+), i went from $10,000 account to $7000, then someone advised on how to buy/invest stocks (and not daytrade), 1 year later that amount went to $20k. Then i restarted day trading stock and brought it to $30k.
So there I was, 21 years old after 2 years had $30k account. I was doing well - we were all trading some bank or whatever at $6 a share (so you can buy say 5000 shares). Guess what?
On one of the trades after a lot of us took in the trading room (it was the old days on the IRC), the market froze.
Yes, stock halted. Major news pending. Company announced CEO has resigned and is filing for chapter 11.
The stock opened trading at $3. Account went down 50% in basically 15 minutes
But that's not hte worse. I had a stop loss order so i took the hit immediately. There were other people there who decide to hold over night and hope for a better exit (basically there were daytraders because in that market, it was beginning of that big bull run - you make a mistake you can hold the stock and sometimes it'll recover just fine). So they held. The stock went to pink list in 2 weeks.
I did recover from it - the same person who advise me on trading stocks said if you want to minimize your risks, use options for trading (deep in the money, so low premium value and basically you won't have the same issue of losing 50% of your money at once, you'll simply lose the option value). That account today is doing well (i stopped trading in 1997 and just put in different market sector funds).
Bottom line is, i consider myself to be an OK trader in stocks but futures is a totally different game. Pace is much faster - i guess the margin is lower because it's highly unlikely the market will move 50% instantaneously like a stock might (which is why stock margin is 50% and futures is morel like 10% and 1% for some of these crazy day trading margins)
I don't know why you're committing $20,000 and using more than one contract - you can easily test your theory in a $5k account with one contract. You get the exact same dollar amount per trade.
I don't know if you're aware of this... it's a $50 * the price of S&P500 contract you're holding. If we get a stock market halt event (like 9/11 - remember that day? Market halted, completely and opened days later 15-20% lower) you'll be screwed. Let's say it opens 10% lower, you'd be owing the exchange basically another margin ($5000 will be wiped out, and then another $5000 you'll have to come up with PER contract).
Can you imagine if they announced Greece/Spain are in default during market hour? We can indeed, have an event where the stock market can get halted (which may mean futures market too).
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I am sorry if I confuse you because my English is not my native language.
In the first image, that is the demo account trading for 50k ( test account)
In my actual trading with 20k, of course the contract limit has to be 40 contracts for $500 non-overnight margin.
I do not enter a trade with 40 lots, I know it is crazy to do that.
I enter a trade with 4 lots and add more depending how the movement goes.
So far, I never reach a limit of 40 lots, the most I hold at one time 28 lots. That level has almost break my
nerve and I have to hold my breadth for each tick that move against me.
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