I have absolutely no idea where people get off telling you you can't trade profitably unless you have $25K - $50K. HorseFeathers! What do they expect you to do - trade 100 contracts at a time? All you need to trade with Mirus / Zenfire (considering they have $500 margins) would be a minimum account - starting with 1 contract and building from there.
That means with a $25,000 account, you could (not that I would recommend it!) trade 50 contracts at a time ($25,000 / $500 = 50)

Don't let these people dissuade you from trading a small account. To margin-trade stocks? Yes - because of the SEC day-trading rule - you would need $25k to do that - but not futures! Besides, the 60/40 rule regarding the tax man and futures is much more attractive than the taxes on day trading stocks. My 2 cents? You trade a LARGE account when you are a beginner & you will SOON have a small account! Practice, practice, practice, read & absorb as much as you can, then practice, practice, practice some more. Don't jump in the deep end of the pool until you can swim in the shallow end. It's that simple. You don't need 50K to start out. In fact, I'd advise against it. I've known those who did have that much to start with & lost it all. If you're going to lose, it's much better to lose $2500 than $25,000!

a.) First of all, if you are not profitable, consistently, SIM trading, there's absolutely no reason to go live.

b.) That's a good start!

Get all your ducks in a row, SIM trade for as long as it takes to become CONSISTENTLY profitable, then CONSIDER going live. If you have a down day - go back to SIM & stay there until you've worked out the bugs. Rinse & repeat.

PS When I go to Vegas and gamble I always beat the house. Always. It's about money management and finding your edge.

The casino has an edge on every single game. If you're an expert card counter in blackjack, you might eek out a minute edge which wouldn't mean much unless you were betting a huge amount of money at the perfect time and rarely lost. That would surely get the casino's attention and you wouldn't last long there.

If you are always beating the house, it is due to either luck or cheating. Money management will simply stall of the eventual grind of your bankroll in a casino.

Repeat: You have no edge in a casino game.

The issue I have at the mo is that my sim trading is consistently profitable, but I do not know if it would be technically possible live. I trade very small profit target and stop loss and sometimes make over 100 trades in a night (say 2.5 hours trading).

I don't know if the latency to the broker or real liquidity would kill my trading style, so that is why I want to go live with a small account, trading only one contract. To learn how it is like to trade for real, and from there I can evaluate whether my style is just not possible and how to adjust etc.

Initially I started out using a small time-frame chart & tried to nibble my way to the top & eventually found out that this trading style was either going to give me ulcers, deplete my account, or both. We're all different, however, and what feels like a good fit for one may be a poor fit for another. May I suggest a small SIM change - just as a test? Try a larger time-frame chart & try limiting your trades to 2 to 4 a night instead of 100. Do that for 5 days & see if there is a difference in profitability in comparison to your usual trading style. It's BORING, but seems to be paying off for me. I found myself beating my head against a wall, early on, wondering "Why isn't this working for me!!!" "I'm going to make this work!!" The trouble was "I" was the problem. Once that was recognized, then it was time to reassess and go back to the drawing board. Ego played a very large part in keeping me on the losing side. Letting go was the most difficult aspect of it all. I was sure that if I kept doing things the way that I had, that eventually it would work to my favor. Seems I was trying to bend the market to my will. Not that I'm saying you're anything like me. I know nothing about you, your personality or trading habits. Just trying to share what brought me from there/then to here/now.

I'm more peaceful now, more calm, relaxed & confident. Yes, a larger time-frame requires larger stops, but if you have a good setup & trust it & can read the signals it gives, as though you were reading a road map, then switching to a larger time-frame setup shouldn't make a difference.

Personally, I've come to recognize what Big Mike has advocated as well - trading doesn't have to be a full-time job. In other words, if you're used to working 8 - 10 hours a day, that doesn't necessarily mean you have to trade 8 - 10 hours a day. I'm coming to realize more often than not, it's to my benefit to place a few (2 - 4 trades) in the morning session & be done with it by lunch time. Once I stopped trying to trade as many hours as I work, in a week, it became more fun and ultimately more profitable. I took the pressure off of me.

Just a suggestion.

Initially I started out using a small time-frame chart & tried to nibble my way to the top & eventually found out that this trading style was either going to give me ulcers, deplete my account, or both. We're all different, however, and what feels like a good fit for one may be a poor fit for another. May I suggest a small SIM change - just as a test? Try a larger time-frame chart & try limiting your trades to 2 to 4 a night instead of 100. Do that for 5 days & see if there is a difference in profitability in comparison to your usual trading style. It's BORING, but seems to be paying off for me. I found myself beating my head against a wall, early on, wondering "Why isn't this working for me!!!" "I'm going to make this work!!" The trouble was "I" was the problem. Once that was recognized, then it was time to reassess and go back to the drawing board. Ego played a very large part in keeping me on the losing side. Letting go was the most difficult aspect of it all. I was sure that if I kept doing things the way that I had, that eventually it would work to my favor. Seems I was trying to bend the market to my will. Not that I'm saying you're anything like me. I know nothing about you, your personality or trading habits. Just trying to share what brought me from there/then to here/now.

I'm more peaceful now, more calm, relaxed & confident. Yes, a larger time-frame requires larger stops, but if you have a good setup & trust it & can read the signals it gives, as though you were reading a road map, then switching to a larger time-frame setup shouldn't make a difference.

Personally, I've come to recognize what Big Mike has advocated as well - trading doesn't have to be a full-time job. In other words, if you're used to working 8 - 10 hours a day, that doesn't necessarily mean you have to trade 8 - 10 hours a day. I'm coming to realize more often than not, it's to my benefit to place a few (2 - 4 trades) in the morning session & be done with it by lunch time. Once I stopped trying to trade as many hours as I work, in a week, it became more fun and ultimately more profitable. I took the pressure off of me.

Just a suggestion.

Thanks The Wizard.

Sounds like a sensible suggestion. I have been suspecting all along that as I progress with my trading I will end up trading less and trying to capture larger moves.

I checked my trading stats for the month of August and I am actually trading far less than what I was a month or so ago. 33 trades per day for August, and as the month has gone on I have traded less. So the 100 I mentioned earlier may be inaccurate in hindsight, although there certainly were 100+ days earlier on. On those days I was fully aware that amount of trading is ridiculous, even though I was well in the black. It is just not sustainable, and probably would not work with live latency and fills.

33 trades a day is still probably too much... However I do feel very comfortable on 1 minute charts going for small moves. Most of my trades are capturing equalization in the noise. I think there is a lot more information displayed the smaller the timeframe. If a trader wanted to trade the underlying market moves rather than the short term noise, it seems to me smaller timeframes would still be useful for timing entries.

However, I like the idea of trading less. So I think next week I will give your suggestion a try. Try trading larger moves/timeframe for the week.

Cheers

Hi all,

I recently started reading "High probability trading" by Marcel Link. So far the book seems good.

The book places a lot of emphasis on not being under capitalized and implies trading with less than say 25k to 50k would be very difficult.

I have seen this echoed here by a lot of people, and it is clearly true.

However, having said that I wonder the following things:

a) Can it be a worthwhile exercise trading a small account when you are a beginner, just learning the ropes, using small positions sizes and managing risk fiercely.

b) Through selective trading and good risk management is it possible to be profitable with a small account with reasonable (I.E small) profit goals?

To expand on b; an example might be only trading with the trend, on a pullback when the price action has started resuming in the trend direction. Stop placed just below the lowest pullback point in order to kill the position if it turns out to be a reversal. This would allow a tight stop while giving a decent probability of a gain.

I realize this is a simplified example, but I am sure you get what I mean.

Being super selective in which trades you take may allow you to have the tight stops you require while still giving you the chance for profit.

I am very much a beginner at this, have been sim trading for about 3 months now, and plan on going live next month with a 5 - 10k account (part time after work). I expect to lose most of this, or at least be extremely happy if I can break even in a year. But I may hold off if the experienced among you truly beleive this is a bad idea.

Any thoughts appreciated.