Considering Margin with Money Mgmt and other ?'s - Psychology and Money Management | futures io social day trading
futures io futures trading


Considering Margin with Money Mgmt and other ?'s
Updated: Views / Replies:543 / 3
Created: by jwcap70 Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Considering Margin with Money Mgmt and other ?'s

  #1 (permalink)
Trading Apprentice
Raleigh, NC
 
Futures Experience: Intermediate
Platform: MB Trading
Favorite Futures: Stocks
 
Posts: 2 since Jun 2012
Thanks: 0 given, 0 received

Considering Margin with Money Mgmt and other ?'s

Just starting out trading on my own (spent years at an investment firm trading and portfolio management so have experience just not on my own). I have a few questions I have come up with as I set up my trading style.

Q1. I am starting with a $50,000 but will have a margin account so it should be $100,000 to use. Let's say I use a 2% risk per trade. Would I do 2% of the 100k or the 50k?

Q2. I trade 9 specific stocks and 5 specific commodities. To determine how much to allocate to each market, i would take 100k divided by 14 and that's the amount to use. Or is their some other way to formulate this? Under this scenario I would be allocating ~7% to each market (based on the 100k). Is that considered too much?


I do have more questions but that's it for now. Thanks in advance.


Last edited by jwcap70; June 27th, 2012 at 05:14 PM.
Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Elite Member
Austin, TX
 
Futures Experience: Master
Platform: ninjatrader, r-trader
Favorite Futures: CL, NG, TF, NQ, YM, GC, ES
 
liquidcci's Avatar
 
Posts: 862 since Jun 2011
Thanks: 609 given, 1,051 received



jwcap70 View Post
Just starting out trading on my own (spent years at an investment firm trading and portfolio management so have experience just not on my own). I have a few questions I have come up with as I set up my trading style.

Q1. I am starting with a $50,000 but will have a margin account so it should be $100,000 to use. Let's say I use a 2% risk per trade. Would I do 2% of the 100k or the 50k?

Q2. I trade 9 specific stocks and 5 specific commodities. To determine how much to allocate to each market, i would take 100k divided by 14 and that's the amount to use. Or is their some other way to formulate this? Under this scenario I would be allocating ~7% to each market (based on the 100k). Is that considered too much?


I do have more questions but that's it for now. Thanks in advance.

Q1: 2% of 50k

Q2: I would look at each market and the historical draw downs of whatever strategy you are using when determining what to allocate to each market.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Last edited by liquidcci; June 27th, 2012 at 05:48 PM.
Reply With Quote
 
  #4 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,240 since Jun 2009
Thanks: 29,354 given, 83,237 received

I suggest starting with much less. If you have 50k, then start with 10k. This is assuming you are swing trading. Only after you have proven after say 6 months that you have grown your account using acceptable risk should you consider increasing that amount.

If you are day trading, you are forced to fund with 25k to get past PDT rules, but I would still suggest you only trade a small portion of your 25k account in the beginning. There is no reason to dive head first. Stick a toe in. Then after six months, you can put both feet in - but only up to your waist... just take it slow.

You risk percentage is based on your cash account, so 1 or 2% of your cash account balance. And as for how much to risk in each sector, you need to really understand the correlation across these products. If you are in similar sectors, then it is effectively the same as risking far more than the initial 1 or 2% because of the correlation.

Everything is somewhat correlated, but here is a site from a quick search that shows some correlations:

ETF Screen - Correlation

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
The following user says Thank You to Big Mike for this post:

Reply



futures io > > > Considering Margin with Money Mgmt and other ?'s

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
NYSE Margin Debt At Highest Since July Means Threat Of Margin Calls High kbit News and Current Events 0 April 4th, 2012 02:34 PM
margin being used gparkis NinjaTrader Programming 2 February 16th, 2012 03:31 PM
CME Goes To Margin DefCon 1: Makes Maintenance Margin Equal To Initial For... Everyth Quick Summary News and Current Events 9 November 6th, 2011 12:48 AM
CME Goes To Margin DefCon 1: Makes Maintenance Margin Equal To Initial For... Everyth kbit News and Current Events 0 November 4th, 2011 10:29 PM
Money Mgmt and Compounding nismo EasyLanguage Programming 13 June 7th, 2011 09:06 AM


All times are GMT -4. The time now is 11:53 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-17 in 0.12 seconds with 19 queries on phoenix via your IP 54.90.92.204