$3000 means 60 points on one contract, 12 points on 5 contracts, etc, 6 points on 10 contracts. Or one point on 60 contracts.
If you're a stock investor, the average S&P 500 return for the last 40 years has been around 9%. In today's value, it means about 0.01 POINT per day. To get one point, you'll have to out perform the market by a factor of 100:1:, or 10000%.
This is also the reason why most traders fail. The odds are stacked against them.
It's very simple - prove to yourself that you can do it with $5000 (turn it to $10k in a few months), if you can, then you can trade large amounts. Doesn't matter if you lose 1 point a day on a $5k account or a $5 million account, you'll lose it all, it just takes longer (and probably hurts more) on a $5mill account.
Since you are trying to trade such a large account you may want to try masterthegap.com. His system is gap trading the ES at open, and you can trade it with large size. I suggest you also trade the 1st hour trade with Scott as he has been doing pretty well with it. Check out his site, he has a trial for a small fee. You will need the premium package so you can listen to how he wants to trade the open and the 1st hour . I would start with a few contracts just to get the feeling, then increase size as your comfort builds.
Going to add my little bit of advice. Like most people on the forum, I have made HUGE mistakes in my quest for learning about trading futures. It doesn't matter how much money you have, like a previous poster mentioned, if you can't make money on 1 contract, your sure as hell won't make any on 100 or 1000 contracts. There are more fake, money grabbing idiots out there trying to sell you the "holy grail" than there are heartbeats in your chest. Forget about trying to find a "system" or "method" that works. What works for one person, won't necessarily work for you (I'm sure we've all been down that road before). Just like any business (whether it be real estate, law or anything for that matter), you need to study and understand how it works. Your mindset is the first thing you need to work on to be successful. If you don't have this, look for another career, trading isn't for you.
Most people making money in the market, won't tell you how they are doing it. Plain and simple. Most of us are still amateurs trying to work out where to start. Buy a book called "Trading in the Zone" by Mark Douglas. This guy is a professional trader who explains the ups and downs of trading, and what you need to understand before even dropping a cent. Read up everything you can about Price Action. This is the market's heart beat. Learn how it moves and reacts. Just as a surgeon needs to know how the human body works, traders need to know how the price action of the market works. Once you understand Price Action, then you can throw on a few indicators to help with the market structure (yes, even the Hedge Funds use indicators, but few of them (I subscribe to a particular hedge funds information ;-) )
Once you understand Price Action, look for patterns and other signals (you will notice these things with a lot of screen time looking at your charts) then begin backtesting (for recognition) and forward testing (in simulation) to test your theory. If you can double your sim account without breaking you trade rules, you then give yourself permission to trade live.
The hard truth is, there is no shortcut to trading. Warren Buffet didn't learn the market in a week, neither did Paul Tudor Jones (the greatest trader of all time in my opinion).
As for account size, for $3000 income per day, you only need to $50000 to $100000 to do that (based on 2.5% risk per trade). But that's a later story.
Now for my tough love. If you are after a quick fix, and not interested in spending COPIOUS amounts of time learning the art of trading (reading the markets heartbeat), then find something else to do, you will fail and lose a lot of money. If you take the time and study hard (we're talking a good year if not longer) and learn, you MIGHT get somewhere.
Day trading is the toughest job in the world. It will beat you down, gut you and torture you until you give up, unless you outsmart the market and understand how it works. I will post some useful information when I find it again (I have an entire fold on my hard drive dedicated to trading, including some contacts.) Some of the webinars for the elite section aren't bad either (you will always pick up something new about the market (just don't get sucked in to purchasing any packages)
I will leave you with this final statement. From the mouth of the Great Warren Buffet.
Rule number 1 - Don't lose money
Rule number 2 - Don't forget rule number 1.
If I have offended anyone, my apologies, it was not my intention.
When the government fears the people, you have Liberty. When the
people fear the government you have Tyranny."
- Thomas Jefferson
The following 4 users say Thank You to taylor for this post:
I don't understand your post - can you elaborate somewhat on what you're saying? To me, it seems that Paganini offers good advice by stating that the topic starter should start with a tiny fraction of his capital designated for speculative trading.
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same logic as those who presume that sim trading percentages will port over to live trading and live trading percentages are logrythmic in scale and hence project profitability,
reality intervenes every time and destroys those expectations,
similarly, every new account starts with $5 million dollars
similarly, every new trader starts a new account with the goal of achieving successful use of leverage,
but then you visit forums like Big Mike and find so many of us in our infancy had such delusionary visions of granduer too, only to have to slog through the weeds and swamp and hoist ourselves onto any island of hope and promise, whilest the nest-egg (starting balance) reflects the skirmishes and fire-fights we've all been through.
wow, that reality is a pisser...
The following 2 users say Thank You to kronie for this post:
The idea of generating $5K off a $5M account, day in, day out, averages out to be roughly 25% a year (assuming 252 trading days a year). There is no strategy that generates 25% a year that is a "lock".
Also nothing that does it without risk. Plus the larger the account size the more difficult it can become to generate higher returns at some point. Unless you can diversify and keep size within what a particular instrument can handle your strategy will hit a wall.
While I would have no complaints having 5 million cash it does complicate trying to generate same returns as on a smaller account if going to leverage it.
"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."