In spite of what they tell you, go to the CME site and they will swear up and down that margin is not a loan, how else do you explain that with 5k you can control 60k in some underlying? You take your 250k and decide you want to invest 25k in some commodity and you'd be hard pressed to find any contract worth as little as 25k. Corn is at 6.75. MInimum is 5000 bu so that's 33,750 just for one contract
So basically you don't believe in taking intraday risk but rather just long term investment via futures using little to no leverage.
Ditto. ZR1 some traders think 1 ES contract is 5000 which is the margin. It's not. At the time I write this one ES contract you are trading means you are trading 66,762.50.
Using 225k unleveraged for long term diversified investments while risking 125$ max initial risk per trade in the futures markets intraday while using leverage is what I do. So I take it you guys trade futures without using stops or utilizing the leverage?
well, think about it. What's more likely, some $25 dollar stock going to $50, or the S&P going from 1320 to 2640? All the action over here is the result of margin. Your 250k becomes a million dollars. Instead of buying a 100 shares, you're buying 10,000 shares. At those paper thin margins you better just be taking intraday risk (if you care anything about your 10% 25k) or trading really small.
No, I use stops and utilize leverage. But, too tight of stops in order to minimize risk usually means you get stopped out a lot ot the time and that's like a death of a 1000 cuts (not saying you are doing that!). But I limit the contracts relative to my risk tolerance to give me some breathing room with the stops.
Example of one of my clients' accts, she presently has a 280k cash position and I typically will trade 10-20 contracts(mostly 6E or ES) for her position/trade on that acccount. Im a scalper using mostly 15-30 time frame. This is a typical scenario with my other clients as well. ** I use hard stops
I use 1.5% constant risk per trade, hard stops. Mostly a swing trader. Currently trade 2 ES contracts. After 2-3 more winners I'll be ready for 3, spent 7 months trading 1-2, this line of work is not easy. My goal is to reach the 10 mark and of course more, so far with 2 I can barely make rent and expenses because I need to leave some of the profits on the account to continue to grow. It takes money to make money, the sad truth. FoN
I've seen some scalpers do very well. Seems to work for you very well. It's not for everybody, incuding me. I just trade my own account and most of the time swing trade.