Futures are for Day Traders,is 30 mins chart gear to day traders?

Discussion in 'Educational Resources' started by Azharr, Apr 12, 2013.

  1. Azharr

    Azharr

    Hello,

    I have been lurking around ET on and off for several years... yes years

    I'll paper trading backtesting mode... I read too many and believe I should now focus...

    Someone from CME video recommend that new futures trader should focus on 1 instrument... I decided to go with YM as the ticks are less confusing then NQ and have 1 timeframe 30 mins

    unfortunately he didn't mention about the trading capital.

    another guy recommend tick charts are better then time based chart as it gives a better chart if so what are the equivalent tick charts for 30 mins?

    due to my tiny trading account initially I wanted to trade the M6E - the micro fx futures but the volume seems unwelcoming.

    are 30 mins suitable for intraday?
     
  2. 1) A 30-minute timeframe would be okay if you had a much larger account. :)
    2) Invariably, you will get stopped out of a lot of positions because of adverse price movement that can occur during a 30-minute interval compared to a shorter interval. :(
    3) Tick charts are too extreme in that you can get overwhelmed by looking at so much more price information compared to a longer timeframe. :eek:
    4) Consider starting with a 5-minute or 10-minute timeframe, do your best to keep losses small and do your best to make better "sense" of the market, especially with reducing losses and knowing when a trade is no good. :cool:
     
  3. It all depends on strategy, leverage, # of contracts and many other things. 500K can just as be as too little and too much.
     
  4. emg

    emg



    its the leverage. measure the leverage and volatility before the delivering date. there is no such thing u can trade any commodity/futures instruments with as little as $5000.


    Something small traders will never understand because they are poor and do things the ghetto way.



    the success begins working in the house and not from home. the house will provide $$$ to trade high leverage and volatility.


    Trading from home in the beginning level is for schmuck. trading in the house is for heros. that requires higher education!
     
  5. *heroes
     
  6. What do you anticipate your average holding period to be? The micros look impossible to trade short term.
     
  7. simplest answer, IMO, no... anything over 20 minutes is more suitable for a "swing" trade that will last days vs. weeks... but that is just my opinion...
     
  8. murrica

    murrica

    It is far to difficult IMO to trade illiquid micro futures on a short term basis. Maybe in a few years they will be better, if the volumes grow.

    Here's my free advice.

    Save more cash and allocate $20k per contract, as an ideal *minimum*. Don't trade for income, have another source of income. This is why people like emg keep repeating the same stuff.. which sadly has a lot of validity. He is ostensibly trying to help the small guys from hanging themselves over and over..or just making fun of them.

    As someone who actually studied EE at one of the universities emg mentions in that incessant image repost, and as someone who has definitely tried trading with a peanut piker account in the past (putting me near both ends of the trading universe spectrum that he mentions), I can assure you that you are better off saving your money, refining your method, and keeping your risk per trade low.. the retail futures brokers might advise you on this, but ultimately they will likely push you into trading anyway which is not to your benefit, but theirs. I am much more comfortable now trading with a much larger account, risking a small amount per trade. This helps me sleep at night.

    Good luck. (Although, I do not think luck has anything to do with it, more so the planning/preparation with regard to capitalization and protecting your capital -- rules #1 and #2). Luck is relevant to a single coin flip, or to the occurrence of a string of winners or losers...

    I do not think you need $500k as emg states, but it sure wouldn't hurt. There's a reason that daytrading stocks requires $25k minimum capital per regulation. Don't be fooled into thinking you can have great odds of success with a tiny grubstake. The odds are stacked against you. I'd recommend planning a trip to Vegas with your loved ones for much better entertainment and far less stress.

    I mention the above because I can see clearly why emg responded to you. You're asking the wrong questions, but you did at least mention the capitalization part. Trust me, focus on capitalizing first.. learn to trade first.. save your money.. start slowly. Test the waters. Them waters be full of sharks, and they are hungry for bottom feeders like us retail traders.

    Look up risk of ruin. Someone mentioned that their blackjack buddy had 30 losing hands in a row, which could happen even with a good trading system. Now, how much capital can you risk per trade if that statistically unlikely in the short term, but mostly guaranteed in the long run string of losers, does come up during your trading career? This is a function of performance bond, position size, and stop loss size.. and of course, expectancy. $20k on a contract with a $4k margin requirement leaves $16k of 'draw down' (which you should never approach).. 2% risk per trade is 60% draw down in that 'black swan' run of 30 losers, or $12k... you'd be down to $8k and could recover... hopefully. Emotions, slippage, poor execution, etc, etc, all guarantee things will work against you even more than the 2% per trade.. so even $20k per contract presents a bit of systemic risk if you hit an unlucky streak of losers. Now, as a thought experiment, what are the odds of success if you allocate far less than this per contract?

    In practice, yes, you can trade with less and be very selective. But, I hate to mention this, because, in practice, emotions, slippage/commish, etc all make this impractical. The above is what works for my risk tolerance.

    If and when I have $500k risk capital, I will be looking to allocate minimum $25k - $30k per mini (or more), so I'd never have more than 20 mini contracts at a time with that amount. That's why emg says what he does; you need size to make money, and you need money to stay safe with size.

    This goes out to all you undercapitalized traders. emg keeps repeating the same stuff for a good frelling reason. Save your money and learn some basics on the probabilities of professional gambling.

    Good trading to all.
     
  9. Azharr

    Azharr

    thank you for your advise, will appreciate if ET comes with a thanks button :)
     
  10. Azharr

    Azharr

    I saw this on CMEgroup's website... maybe what they refer to as individuals are affluent people... even so I don't think they have 500k cash in hand (extras) ?
     
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    #10     Apr 12, 2013