it depends on how many contracts you are trading at the same time. Of course there are brokers that allow you to trade the ES with $500 daytrading margin, but that would be ludicrous especially for someone starting out.
So how many contracts could/should you trade with 25k? Although the answer comes down to personal preference one thing that is very imporant in answering this question in my opinion: How much do you need to risk per trade with your method? Let's stick with the ES and assume your method uses 3 points stops on an average entry. Trading a single contract this would be 0.6 % risk on your account capital. With two contracts this would be 1.2%. This seems acceptable in terms of risk, but you'd be limited to two contracts (unless you risk more) which also limits you on the methods for exits to a maximum of two targets. Which probably makes it harder for you to be profitable.
The above is just my personal opinion and when it comes to risk I like to keep it small. So I am not saying you shouldn't start now, but I think you either have to take too much risk or make it harder in other ways and this doesn't help in shifting the odds in your favour.
Last edited by ABCTG; April 5th, 2014 at 03:17 PM.
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The only thing I may add is also looking at the notional value of the contract.
for example, if ES is at 1800 or 1400 could make a difference on the potential size moves in the market.
For example, as the value goes higher, the same point value fluctuations will be considered less in percentage,
yet the same value and affect on your account. I think this should also affect your decision of size.
PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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This is a popular question I've seen many times on the forum and the best advice is to just start trading live with the smallest size possible. Trade that way for a month and see how you did. Document your trades.
If you can even stick to X amount of losing trades a day or less based on valid entries in your beginning stages you're already far more successful than most people even if you lose money initially. Most people who fail at trading over trade either when they're excited after making money or pissed off that they lost money.
I couldn't put it more simply
Also, you probably already know this but - try not to trade two instruments simultaneously due to their correlation otherwise you're taking on double the risk unless that is somehow factored into your edge. At times ES and Cl will move in tandem.
Last edited by Itchymoku; April 6th, 2014 at 03:19 AM.
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Forex might be an option or take a look at one of the micro-FX contracts on CME - M6E for example. This can help you getting a feel for things when trading live, but at the same time limit the risk.
Another thing you probably know already, only trade with money you can lose without the loss having an impact on your financial situation i.e. never trade with money you need for paying bills, loans or what ever.
My first thought is, you should all ready know the answer to this question based on your demo trading. If you aren't sure, I would suggest continuing to demo trade, or trying a combine which really shows your daytrading stats.
Failing that, I would suggest a $2000 account with Oanda and trade WTI (CL) and the spx. If you can make money with the $2000 account, then move up to a larger account. The key isn't the money you make, it's the process of trading correctly... That is what you need to learn at the beginning.
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