He is talking about the Pattern Day trading Rule. If you were to be trading stocks, you would need at least 25k in your account in order to make more than 3 trades in a week (or something like this). If you dip below 25k, your account is frozen. So the idea is that traders with small accounts don't go the day trading route and focus more on investing. Its a rule that is placed on brokers who have to monitor their clients. But of course, with futures, there is no such rule. The point he is making is that with such a small account, you have no hope in hell. But don't mind him. @comagnum is a really great guy, and I enjoy his posts, but he simply does not want to accept that when trading futures, the metrics are much different. You cannot think in terms of percentages of your account. If you can pull off 5 ES points per day, this would be $250, and it doesn't matter if you have 10k in your account or 100k if you're only trading 1 contract. (the % gain would of course be different) But, if you're a seasoned veteran and can trade 10 contracts at a time, then you just need to calculate how much margin you need for this. What you're doing is essentially the opposite of how most people think. As long as you don't let the mental game get to you, then trading to make 20 ticks per day is the same if trading 1 MES, or 1 ES, or 10 ES. Its simply your account size that dictates the size you can trade along with the expectancy of your trading plan and past performance.
Thanks for the great explanation. Indeed, "the mental game" is the entire focus of this journal. After today, with about $90 net profit, my current S&P points/day average is 28. If I can keep this number above 20 full points per day and slowly grow the contract size as planned, then things will get really exciting around here. But I know a trader who is doing even better at 3% to 5% per day, but he says he has reached his max size. He has tried to add more contracts, but he can't. I hope I can push through that barrier.
sstheo, thank you for that journey of your trading live ! I think a lot of people can learn a lot of that ! It is mostly a long way to bee sucessfull ! One thing most people do not see, that everyone has to find his own trading style There is no good or bad to trade as a scalper or as a daytrader or investor. It has to fit that what you want. That what you like.Otherwise you will have no success ! As written above I am also a scalper. I tried to teach some friends my style. Today I think you can NOT LEARN SCALPING. You have to find your own way, with your own experience. But certainly you can shorten the way, when you listen to other successfull traders mostly out of psychological problems they solved ! Everyone Good Luck in Trading !
Yesterday I took 35 trades, and you saw the charts with about half of them - hot off the press. With 98 dollars NET profit after fees, I got about 50% of the goal for the day, but the price action seemed weird yesterday, and I don't have any regrets. "When in doubt, stay out." On a per-trade basis, the profit was perfectly in line with my current average of 2.2 MES ticks and average net trade profit of $2.80.
...sst, chart pics you say? A Spreadsheet Timetable Scatterplot Graph might be informative: x-axis sessiontime(9to4), y-axis eachtradeP/L
Ninjatraderbrokerage provides free services for limiting the type and number of traded contracts, blocking the account when the daily loss limit is reached. Perhaps there is something similar in AMP.
OP cannot switch to ES with his account size, as he stated, he is trading two different products to hedge each other, I think that is his main way of avoiding taking big losses when market jerks around to kill the new comers with less than 10 years of experience in this field.
Yep. Mental only. It's all about psychology. It was an important discussion I had with him. Maybe there is a word for a "Dark Side Epiphany" LOL? Maybe "Bombshell"? "Missile to the brain?" or "Thunderbolt?" I recognized that there may be a big evil boogeyman out there I hadn't counted on, who is waiting to derail my progress... My friend is making over 3% per day and has for 20 years. Who am I to argue with him, and who am I to think I will be any different? Of course I am an eternal optimist, as all of us traders are, and I hope I can be different and just push through each successive threshold unencumbered.