Trade futures only after you have read and understood articles like this one. I think it is better to stick with stocks. If you trade longs only in names like SPY you may do well. This may explain why. Good luck to you.
@Sergio77: good literature (skimmed). I have to read them deeply (I am CFA level II). I am on this website for ~ 1 day and came across interesting people/material. I am convinced that I should not over trade and just stay in the game (in equities only) and do lot of homework
Kashili, one thing people haven't mentioned yet which you should know before venturing into S&P eMini futures is that 1 contract (yes one) has a notional value of ~ 94,050.00, so a -0.5% move will cost you close to $500. Even if you open an account with a broker that lets you trade futures with relatively low margin (~2K) and your limited 6K of capital, after about a ~4% down move you will no longer meet your margin requirement and will get a margin call, and may even end up owing money to your broker. These are the wonders of leverage
What you said has various inaccuracies. First of all, the CME group sets minimum maintenance margin requirements for the ES contract. This changes from time to time. Right now its $4,325 USD. Brokers must follow this. More often than not, brokers have higher standards. So, there is no way any legit broker will allow you to trade ES futures with a 2K margin. Some brokers allow less margin during trading hours but near close the CME requirement must be fulfilled. Second, the notional value of an ES contract changes. What matters is the multiplier, which is 50X the S&P futures. As such, one should not view it as a % change that you can sustain a loss on before liquidation, but rather the dollar amount above which you will trend below maintenance margin requirements. So, for a $6K account, it means he can take around $1K loss.
No that is intraday margining. Their maintenance margin is $5406.25. This is higher than CME's margin requirement of $4,325.
This why I used "~" to give "approximate" amounts and clearly stated "if" he was able to open an account with 6K and around 2K margin requirement for ES... however, if you want to be accurate, you can compute the amounts and percentage moves yourself... my statements were made for an intraday scenario, of course overnight margin will be higher. Notional Value = ES-price-quote <es-quote-price> * $50 IB minimum Intraday Margin = $2703.125 ( https://www.interactivebrokers.com/en/index.php?f=margin&p=fut ) --of course IB requires min 10K to open an account. Go have fun w/the numbers!</es-quote-price>
Has absolutely nothing to do with money, but money shows how well you are playing the game. I would recommend you trade stocks till you made $100,000 and by then you have mastered how to trade stocks cause you have accumulated 100,000 points in the game. Then taking the same ways of trading stocks, apply to trading Emini ES which IS margin, as $400 margin is really controlling what $93,800? I LOVE PLAYING THE GAME.