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Where would you start as a beginner with $1500 to risk?


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Where would you start as a beginner with $1500 to risk?

  #1 (permalink)
 DCap 
Baltimore, Maryland
 
Experience: Intermediate
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So, I watched a YouTube video by Don Singletary and I purchased his book entitled DayTrading Micrcofutures for income.
Now I am confused – I read someplace else that beginners should Swing Trade first.
I like the action of Scalping – but wondered if there is more safety in swing trading…?
Where would you start as a beginner with $1500 to risk?

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  #2 (permalink)
Symple
Zuerich / Switzerland
 
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Hy @DCap

Looks like this is the first posting from you in this forum. Well, then first of all congratulations that you have dared this step.

You call yourself an "Intermediat" when it comes to knowledge about trading. So I can assume that you already have a greater knowledge in the trade and not only what you describe in your posting? Furthermore your statements say that you are interested in the "S&P". So far so good.

Now let's get to the essentials, in wich I not will go point by point what you are asking for, instead pick out two topic of it: You have a starting capital of "$1500". Did I understand that correctly or is this just the capital you want to use as "Risk per trade"?

In both cases, whether I say so or not, you will have to change your idea of which market you are going to trade, because the "Day trade margin" of any broker will force you to do so if you really want to trade the "Emini S&P 500 future" with him.

So a first starting point is to look at the "Margins" at the different brokers to see which market makes sense for you, as there are huge differences in these "Day trade and Initial Margins". Look at the micros in the "Currencies" and in the "Corn", because they fit much more realistically to your budget. As lower the "Day trade and Initial Margin" is, as better for your budget. Why?

If your risk per trade, with low trading experience, is low, as more you can trade from the beginn with real money. If you are wrong you lose only little, but you will learn very fast from the beginn how your psyche is reacting to this real moments in trading when you put your money on the table and lose some of it. Those experience with your psyche you will only learn by doing so as described.

As a second step I recommend you to take a look at the following link to understand a bit more about risk management in trading, Of course: You can trade Micros with out options, but at least you will have some further ideas about "Riskmanagment".

Micro E-mini Futures and Options Webinar: https://www.cmegroup.com/articles/videos/2023/micro-e-mini-futures-and-options-webinar.html

Whish you a good start and have a nice day. Symple

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  #3 (permalink)
 DCap 
Baltimore, Maryland
 
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After reviewing my question I guess I could have provided a more clear query. However thank you for your reply for it did provide something I hadn’t considered.

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  #4 (permalink)
 
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 DavidHP 
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DCap View Post
After reviewing my question I guess I could have provided a more clear query. However thank you for your reply for it did provide something I hadn’t considered.

If you are asking if you need to swing or scalp, it depends on your style and ability to trade either type.
Scalping usually means you will sit at the screen for a time and 'trade' the market.
Most traders find this causes several new issues:
1. Over trading
2. Revenge trading
3. Closing trades too early or too late
4. Holding a losing position.
5. ... Many other issues.

Swing trading has it's own set of issues.

I suggest you trade the micro futures instruments and try each style of trading.
You will quickly discover if you can tolerate either or neither.
(you will lose it all or win some / lose some)
Using micro futures will allow you to trade longer but usually you will end up losing it all unless you get lucky.

If you are lucky, stay small and trade with a defined plan.
I suggest always know your entry (and why).
Place a stop loss order and a target
Trade something not so volatile (like MYM or MES). (MNQ is very choppy and moves a lot)

Enjoy the journey
FWIW

Rejoice in the Thunderstorms of Life . . .
Knowing it's not about Clouds or Wind. . .
But Learning to Dance in the Rain ! ! !
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  #5 (permalink)
 ZviTradingCoach   is a Vendor
 
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DCap View Post
So, I watched a YouTube video by Don Singletary and I purchased his book entitled DayTrading Micrcofutures for income.
Now I am confused – I read someplace else that beginners should Swing Trade first.
I like the action of Scalping – but wondered if there is more safety in swing trading…?
Where would you start as a beginner with $1500 to risk?

Sorry to spill cold water over the enthusiasm - I'm being blunt but for your own good so please take this the right way:

If I were a beginner with 1500$ to risk I would start with SIM trading... and do that until I build both proven skill and significantly larger capital. And you can SIM trade either method, or a little of both. I would not risk even 1 of the 1500$ yet.

1. Anyone asking this question is clearly at their first stages of trading. This is time to experiment and expand knowledge (and there's plenty of that to do), not to throw away money.
2. Experiment. Get the feel for the risks and opportunities with both styles. See which fits YOU and your strengths and personality in actual simulated trading, not books and videos.
Then get good at one. Neither style is "generally" better for all beginners, and just to be clear - both are hard.
3. 1500$ is not a trading account. it's EXTREMELY undercapitalized and prone to overtrading and over-risk for any reasonable risk-management strategy. Yes, even for micros.
4. Live markets aren't for learning the basics. They're for making money after you are skilled. That's the beauty of SIM. And I'd give the same answer if you asked the same question with 100K$ to trade.

And once you're proven good at one style, and have sufficient capital, then you'll know yourself what to trade.
Good luck!

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  #6 (permalink)
Symple
Zuerich / Switzerland
 
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This just by the way:

Well, this is such a topic for those who ask big questions and then play around with SIM and paper trading for a long time.

Then they think that by playing around they now know how they will really conquer the world psychologically in the real game in the market, even with the smallest money, and then it was just again not as SIM and paper trading have proven so successfully.

Riskmanagment is the answer and a market and a Derivative Traden which is to be traded immediately live with only smallest Margins and only smallest losses brought.

I started with stocks in the Techbubble and later switched to futures and options. In both cases I was invested with my own capital from the first trade and lived through huge profit and huge losses life.

The learning effect is the same when it comes to trading ideas in cheap markets, only when it comes to putting big money on the table, then some things start to knock in the psyche.

Who does not want to accept and understand this. well then have fun while starting and practicing this activity.

Symple

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  #7 (permalink)
 
bobwest's Avatar
 bobwest 
Western Florida
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DCap View Post
I like the action of Scalping – but wondered if there is more safety in swing trading…?
Where would you start as a beginner with $1500 to risk?

Let me confess that the first thing I thought when I read your post about having $1500 to put at risk was, "Put it in the mattress."

Why? Well, there is no "safety" in swing trading, or in any trading. Whether scalping or swinging, you are at risk of seeing it all go away, very fast. You will lose a lot before you can reliably trade, if you ever do.

However, I didn't say to use the mattress -- I just want to tell you about the risk. You may think you understand the risk, but sadly, no one can until they start losing some money in real trading. Hopefully they are learning too, but some things have to be experienced to be learned.


DavidHP View Post
If you are asking if you need to swing or scalp, it depends on your style and ability to trade either type.
...

(you will lose it all or win some / lose some)
Using micro futures will allow you to trade longer but usually you will end up losing it all unless you get lucky.

Yes.


ZviTradingCoach View Post
Sorry to spill cold water over the enthusiasm - I'm being blunt but for your own good so please take this the right way:

If I were a beginner with 1500$ to risk I would start with SIM trading... and do that until I build both proven skill and significantly larger capital. And you can SIM trade either method, or a little of both. I would not risk even 1 of the 1500$ yet.

Also, yes. But see further comments, below.


Symple View Post
Well, this is such a topic for those who ask big questions and then play around with SIM and paper trading for a long time.

Then they think that by playing around they now know how they will really conquer the world psychologically in the real game in the market, even with the smallest money, and then it was just again not as SIM and paper trading have proven so successfully.

Riskmanagment is the answer and a market and a Derivative Traden which is to be traded immediately live with only smallest Margins and only smallest losses brought.

Also, yes, even though this advice is pretty much the opposite of the previous post, at least regarding sim vs. live trading.

The reason I say "yes" to this also is because just "trading" in simulation will get you used to a given method, and hopefully develop some skill at it, and let you get familiar with the market, but trading is not the risk-free exercise of sim. Once you have money on the line, the psychological situation changes entirely, and the things you think you know, both about trading and about your own responses and decisions as a trader, go out the window. It will surprise and shock you.

If you really want my advice, I suggest you re-read all these responses, all of which I think are very good in their way, looking for the common thread in them (which, spoiler alert, is mainly about managing risk and loss), and perhaps any others that come in later, as well as read extensively in this forum. You will find many different points of view, some more solid than others. But then you are going to have to trade. I do suggest sim at first, but be aware that trading is not an arcade game, but sim trading is.

You will need to test things out for yourself. Come back to the forum for more suggestions, advice and compassion, which you will need, and see if you can make it work.

Good luck.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #8 (permalink)
 DCap 
Baltimore, Maryland
 
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Thank you for your reply!!

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  #9 (permalink)
 
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 SMCJB 
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DCap View Post
So, I watched a YouTube video by Don Singletary and I purchased his book entitled DayTrading Micrcofutures for income.
Now I am confused – I read someplace else that beginners should Swing Trade first.
I like the action of Scalping – but wondered if there is more safety in swing trading…?
Where would you start as a beginner with $1500 to risk?

Unless its $1500 you are very prepared to lose, because its highly likely you will lose it, I'd go with this guy...


bobwest View Post
"Put it in the mattress."

although I'd probably put it into a 5% CD or the S&P500 or NQ100 rather than literally in the mattress.

Trading seems fun, sexy, glamorous and easy. In reality its the opposite and the vast majority of people fail miserably at it, and that's just from a financial standpoint, and ignores the time they waste while losing their money.

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  #10 (permalink)
 
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 blackgrey45 
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Many will disagree with me but I think you will only learn how to trade if you trade live. Trade the micros and work on risk management. I never learned a thing from paper trading and only advanced my trading by risking my hard earned money. This is because there is no risk in paper trading and you make completely different decisions at all stages of a trade. Yes there is a 95% chance you lose every penny of your 1500 dollars but that is what everyone must do in this business. You can sim trade for years and you will change your whole plan once you encounter your first loss in live trading. If your not comfortable with losing money then don't trade futures.

Good luck on your journey and be smart!

Blackgrey45

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