yeah i know.....i said i do both... swing ( a few days to a few weeks)...and day ...(a few hours)...... is it fair to say if i can trade the SPY etf i can trade the tamest emini?
Seriously dude, if you are making the move to futures, then get yourself a simulated account. Period. Hopefully your broker provides such a thing. If not there are many that do, and if there is a cost, that cost is insignificant compared to the jolly shagging the market will give you if you start daytrading Futures unprepared. If you are not consistently profitable on the simulator for AT LEAST A SOLID MONTH, then don't think think about trading even one contract of Corn futures. This might sound a little harsh, but you'll thank me later - or perhaps not
Futures markets are a lot more efficient than equities markets, in my opinion (I have traded both). It is not possible to practice on a size less than a 1-lot, so it costs more to trade it with a lower edge (assuming you are not a member of that exchange). I think in either case, you might want to stick with the YM or ER2. It is not as deep and has some good swings. Tick value is lower but the cost per turn per tick is higher, so you don't want to go crazy in there. As always, read the contract specs, know the underlying stocks well (which is most heavily weighted, etc), know when expiration is and when roll over takes place, know the trading times, understand its open interest and watch it during a significant economic release. These are necessary to trading anything in the futures market.
I have been reading your posts in many threads. You did not make the cut for me to continue to track you since I don't think the investment of my time is warranted. here is where you appear to be sitting from my viewpoint. You have lost money for probably 6 or 7 out of 8 quarters that you have traded. Hance you have sunk your initial capital and added capital to it and now for a quarter or two you are recovering intial capital. you initial capital came from somewhere and that counts a a success. Knowing to get into stock ownership also counts s a success. The time you spent getting started in owning stocks was a very slow start vis a vis swing trading where you do not as yet have any concept or where to put your money and how fast it can make money for you (you are using short term and intermediate term trades and some less than position trading periods). This means that you do not have a stock investing nor trading plan as yet. If you did you would know some things and one of those would be the answer to the question you just ask. You accept input haphazardly at best (see other threads). I have seen you givee advice too. Why? With respect to commodities trading as you define it and are considering doing it, you will not make any money doing it. Ask yourself if you made any money in the last two years unexpectedly. If you did it was not your fault. If you go into commodities trading and make in money, likewise, it will not be your fault. Lets say your experience in equities has come with some setbacks here and there. They cost you some money as you say. Think of how you handled being a loser for 6 quarters so far. Maybe once in a while, especially early on, you were kidding yourself about how you got yourself into trouble. Have you stopped kiding yourself as yet? In commodities trading there are some basic truths that have to be dealt with from the get go. They center around a few human characteristics. knowledge, skiils and experience for you at this point are nada. Do you know this? Do you know that a person cannot kid himself when he is trading commodities? Do you know the role of "hope" in trading commodities? Have you gotten to the point in investing where when you are losing, you know there is only one reason? (answer: you are still in the market going against any rational rules that you have) To get around to trade commodities, I believe being very successful in making money in equities is a precursor. I also believe that no person should ever trade commodities with anything other than profits previously made in investing. Period. i bleive the time for a person to consider trading commodities comes after he know longer knows how many times he has taken his initial capital out of the stock market investing that he has already done. Lets go through the question that you asked about the amount of intial capital a person should use to begin to trade in commodities. Everyone knows what the answer is except a few I would imagine. The answer is zero, in my opinion. Why? I believe it is because you have proven to yourself that you know nothing by asking the question. A commodities trader must deal with something you have never seen before, it appears. So you must go back to stocks and learn about this with real money and use it to make enough money to get your beginning losses covered by a multiple of some sort (think 10 x or so). Trade you stock account(s) on margin beginning when you have taken you original capital out and still have an amount equal to your initial capital to invest with or some such thing. Margin trading is involved in commodities trading and as such it makes your stock experience so far kind of not very important especially if you have not as yet cured yourself of kidding yourself. Kidding and hoping are not allowed in commodities trading. Nor is luck. After a trader learns to do low risk trades on paper, he gets the right to play with only minumum captial during those times of the day that that one trade can be done. Reread this paragraph as saying A trader only takes on a trade where he knows THE exit in advance. You do not know to start with zero. You do not know how to exit your stock trades as yet since your entries take you to short medium and long holds during all of your career (where the first 75% of your stock career was a losing one). What gives? How to you connect with the idea that spys could be a warmup for commodities trading? Because they involve a group of stocks? Because you think the price movement has something to do with the set of people who trade commodities? My guess is that commodity traders don't do spy and vice versa. How many volumes is your journal at this point? Pick a bunch of ET posters who say they trade ES and have been posting for two years and have over 250 posts. Go to their first posts (bottom of highest page) and start copying their posts into a word file one after another. When you get it done compare it to your journal volumes for stock trading. Do not continue with any series after the guy blows up the fourth time.
The biggest difference to me is the instant liquity. Prior to trading YM I used to trade WMT on a daily basis and it was a PIA trying to get short as the stock was falling. I still use DIA charts while trading YM so I think it would be helpful to start trading 100 lots of SPY before trying you hand with the leverage of futures.
"Ahem*...... i know a "friend" who has a 50k account size..... how many contracts do you all think is the max he should trade??" How fast does he want to blow it up ? Start with 1. "ok so what e-mini do you think would fit me best??? " I would start with YM, but I am biased. Here is some info for you. http://www.cbot.com/cbot/pub/cont_detail/0,3206,1560+17723,00.html http://www.cbot.com/cbot/pub/cont_detail/0,3206,1560+17731,00.html
With the indexes you will have less setups to trade so you might be tempted to overtrade. Be careful about that.
You are a jack ass. What gall you have to make so many assumptions about me. First off....look at my screen name...does it look like i have an ego? I'm asking about futures because the whole time i have been trading its been solely equities...want to learn one thing well before going into another. Second: If you read my posts, you would see that never at any time was my account down more than 6%....all those losing quarters were small loses or close to break even... i never added any additional capital. Its all about strict money management and risk control. Batting ave. and Sharpe ratio...are the keys. I have a trading plan and also track my trades in great detail in an excel program i made. I ask for help with e-minis and all of a sudden i have you preaching to me about my swing trades in stocks..... my winnings are not luck. How would i have my first 1.75 years of trading all be consistent and steady losers (controlled losses) and have my last 5 months all winners .....does that sound like a random pattern to you? And you ask why i give advice?.....why not....if its advice that is suitable to a brand new trader i see nothing wrong with that. I think we should all help one another. I don't go giving advice about things i know nothing about. Maybe i cant make it in e-minis .... who knows....but i want to try anyway. You like looking down on others....makes you feel like a big shot. Thanks to all of you that are helping me with my questions. I will research the rest on my own....