It makes me sick to think how these guys are throwing around such huge numbers by bouncing off each other, playing their little games, with tens of millions of dollars each day. Meanwhile, I'm just trying to earn a few hundred bux per day, because I don't HAVE billions of dollars to throw around like shit into the wind. I proclaim them scumbags, because they are taking what they have for GRANTED! Assholers!
Speculating with OPM! Fundamentals are nothing more than merely figures! https://elitetrader.com/et/threads/oil-cl-live-intraday-trading.303105/page-12#post-4429231
Listen, if you can make $200 per day on average over an extended period of time - you are golden. Lever VERY slowly. Your sizing bumps should be modest enough NOT to cause you to unconsciously create feelings of doubt. Naturally, the most angst is caused from going from a one lot to a two lot (I do a lot of hand holding and late night Skype sessions with clients). Bumping from a 5 lot to a 6 lot or a 10 lot to an 11 lot is much easier. This is much easier if you have another source of income than trading - and you can give yourself the required space and time to develop. In fact, IMO that scenario is ideal for the lone wolf. This is where I seriously part company with those ET'ers who think it's mandatory to start with $100K. Bullshit. Consistency is the key. Find it however you can. Work for consistency. The worm will turn once you find it and then establish a serious position management and growth regime.
And this is where I seriously part company with people who think they can lump every customer they deal with in their business, with traders they have never spoken with. Every trader is different. Every person is different. How DARE you claim that you think that people who proclaim that $100K is mandatory to start a trading plan are "off", or "wrong", or "bullshit". That is so short-sighted on your part I am aghast that you posted it. This is a business, not a lark. Do you know the trading style of every new trader you encounter? Do you know the financial condition of every new trader you read about on a forum like this? I am trading 1 contract per contract-month in CL, up to 5 months out from spot, and I would feel most comfortable if I had about $300,000 to $400,000 to do it. I certainly do not have that, which is why my live trading is on a break at the moment. I need to reassess my trading plan. Trading is not a joke. If we all stop treating it as such, we can appreciate it for what it is. A business, and a very difficult one at that.
IMHO those of us that swing trade futures, holding overnight to months, need a lot more capital in order to have a sound risk/trade mgmt strategy. At times we may be overnight on 7-10 different contracts. $50K is rock bottom entry, $200K ideal size to make it, $500+ well funded - this is a widely endorsed by the majority of seasoned pros. Scalpers and pure speculators are an entirely different animal altogether.
I get that completely. Personally, I started scalping T-Bond futures at the CBOT as an independent clearing TransMarket Group in the early 90's with $10K. Naturally, I was flat at the end of the trading session. As has been said, everybody is truly different. For the first 6 months, I just wanted NOT to lose money. Once I got to that point, I just tried to make a few hundred bucks per day. For me at that time in my career, my only goal was to build on a very little. These days I swing trade, and of course every trade spends some portion of its lifespan underwater. I've changed my idea of consistency to Win vs Loss and Avg Winner vs Avg Loser.
I'm a little confused by this exchange. At first I thought Overnight was insulted because he thought bone was suggesting you need 100k to start trading, which is isn't suggesting. But as I read it again, it seems like Overnight thinks 100k is too little, and Bone thinks its not even necessary to start with this much. If this is in fact the case, I have to agree with Bone here. I know Lawrence Lugar says this exact same thing. Given a strategy that works, and a trader who knows what he is doing, a huge account is simply not necessary. It all comes down to math. If you know you're gonna put on an ES trade with a 2pt stop and 4pt target, you're risking $100 per trade to make $200. Even with only a 50% win rate, you're making 2pt profit after 2 trades, or averaging 1pt per trade. With a 33% win rate you're at BE (minus commissions of course). Now these are fantastic numbers, and to make it more real, perhaps they should be dialed back a bit (the 50% win rate on 1:2). But the point is that if you are risking $100, you need to be wrong 10 times in a row to lose 1k. If you start with just a 10k account, and you're wrong 10 times in a row, you're down to 9k and can still very comfortably trade. The caveat of course is that you have to know what you're doing, and this would entail more than likely never getting 10 full stopouts in a row. I see in my stats that even the most horrible trades sometimes end up winners. It doesn't matter if you chase prices, or if you fade huge breakouts, or if you just randomly have trades to go long at every swing low, there will be at least 20% winners in there if you simply use the right combination of stop and target (this combination is of course for you to figure out). If all you're ever doing is winning less than 10%, or if you complain that every trade you put on you lose, then you can just fade yourself with amazing consistency! The way to lose money very quickly is to start messing with stops and targets, which is exactly what the newbie will do. He will think he knows better by widening a stop, or by getting greedy and going for more profit than his stats show him is likely, and this will fuck him over. The pro on the other hand will use the power of his stats to his advantage and stick within the parameters that works best. Now if trading CL, a $100 stop is simply not enough, since this is only a 10 cent move, so yes, I imagine 10k is not enough to trade 1 CL contract, but I don't think 100k is necessary either. How much money you need in your account is only a function of what your stop is, and how often you expect your stop to hit, with a nice margin of error. Of course if you have no clue how to trade, then even 100K might not be enough because you will mess your trades up like crazy. But if you were to operate like a coin tossing machine and be religious with your stops and targets, you'd be hard pressed to blow up in the short term in my opinion. Of course if you aren't consistent in your trade management, then anything is possible.
I was insulted (or made mad) by the blanket statement by bone that nobody should need anything near $100K to trade their plan. That makes an assumption about all traders, known or unknown. I am trading with much less than what I would feel truly comfortable with, with MY particular plan, which is why my trading has abated at this time. I was emotional at the time of the post, but cannot stand the generic lumping some folks do about traders in general. I realize that some folks can turn little bits to bigger bits, and some folks need bigger bits to make little bits. It is because we are all different folks, and we have different strokes. Comagnum (Gumby)'s post up there, last night, is on point.