With $ 6,000 you need to be able to use the margin to trade futures within a day to meet lower margin standards. So with said, if you are only going to trade futures like I do, you don't need to use IB. I would use a discount brokerage like AMP futures. If you go this route, you can chat online with them to setup the account correctly to use Ninja Trader. The benefit of NT is that it is a free 3rd party chart maker that once you get your account setup, you will be able to demo trade until you are able to duplicate a profitable setup in real time. Then you pay a small monthly fee to use NT once you want to do live real money trades. If you want to not use their order entry system, I think you don't even have to pay this fee, but for me its worth it so I can have automated orders working without staring at the screen all day. Let's now design a simple trade so that any of loonies that come after me saying this can not be done will be proven wrong. Go to custom order in NT. Set a 4 tick stop and a 4 tick profit target for ES chart 5 min. Name this custom order setup 4v4 even. Now you wait for your setup. You see it, you either limit in or market in long or short with this "even" order already setup. Once in, the trade will move to either the target or the stop. Let's assume this is real money and you already finished demo trading and assume you are just going to take this one trade for the day. If the target is hit, you will now have $ 6,050.00 account balance. If the stop is hit, you will now have 5,950.00 for the day. Using my trusty calculator on my computer, you have just risked less than 1% of your total account balance and at no time were you at risk of blowing out your account. Yes, trading is that easy. However, the hard part is accepting the fact that some days either you will make a mistake or your setup will not work and you will take that $ 50 loss on the trade. You need to have the psychological strength not to jump into another trade to make that $ 50 back since then you are now gambling not trading. Instead at the end of the day, look at your chart and determine why you took a loss for the day. Did you not draw your lines correctly. Did the setup not work. Remember even with a 80% win rate, you will still have some losing trades. Also, like today I just made some money, I need to have the psychological strength not to take another trade just because I want to make more money. Trading is about emotions, where the market moves up or down due to fear and greed. However, to be successful, you as a trader need to strive to not have emotions when trading. For finding a profitable setup, there are free threads in ET from different traders and there are trading books out there. You need to practice till you are proficient and you need to be patient to wait for a good setup. You really just need 1 good setup per day to make money. As one author wrote, a trader who just makes 1 ES point per day of profit has the potential to make $ 180,000 per year. Note I am not saying how many contracts. You can increase contract size as your ability to trade correctly grows.
I stand corrected... actually, these are minimum requirements: Indiv Acct USD 10K IRAs USD 5K Individuals age 25 or younger USD 3K Indian residents USD 2K The original poster mentioned he used IB, so that leads me to believe he's either a student under 25yrs or and Indian resident. And he may potentially be able to trade a future contract on his IB account --I will not recommend it though, til he learns more about futures, margin, and managing risk. <table class="comm_table_bkgrnd" border="0" cellpadding="0" cellspacing="0" height="27" width="580"><tbody><tr class="linebottom"><td class="comm_table_content lineRightGray" align="left" valign="middle"> </td></tr></tbody></table>
If you don't have a trading plan, much less a consistently profitable one (which apparently you do not or else you wouldn't be flat), that's your first step. Without that, it doesn't make the least difference whether you trade stocks or futures or forex (don't know how the last got into this) as you will lose regardless of your choice. If you want to trade futures, however, developing a consistently-profitable trading plan for stocks will have only a general application to your trading, i.e., the process of developing the plan, characterizing your market/instrument, trading the plan, preparing for and evaluating the day/week, etc. It will not pertain to futures trading per se since futures and stocks have little to do with each other, unless your stock happens to be mean-reverting. Even so, futures trade 24/5. Stocks don't. This alone presents challenges for daytrading stocks or trading them over very brief timeframes (the longer the timeframe, of course, the less this matters).
If you are day trading yes, the margin requirement decreases by half within the trading window, afforded to clients of some brokers. But you are setting yourself up for failure here. Nobody can time the market well, and the only fall back anyone has on not timing markets well is they have staying power to take pain. For a leveraged position like futures, and even maxing it out more than CME or broker set maintenance margin requirement during a day trade, it means if you don't profit during that day being that levered, you will be over irreversibly after 1 day.
The product's initial margin for one position/one contract should not exceed 15% of your total excess equity available for trading and your risk should be no more than 5% of available equity on any one trade (including fees and slippage). So, with your $6k account you cannot trade anything with a margin greater than $900.00, which would leave you with only $5,100.00 in risk capital. Now 5% of $5,100.00 is $225.00 (risk per trade), which will give you 20 units of risk. Depending on the market and time frame traded and without a complete, decisive plan, your account will get eaten up based on average market volatility and the learning curve required. Best.
Says who? There is too much 'theoretical' stuff on this thread. Look, you won't get rich trading like that. If you aren't going to make $50,000 USD trading each year at a MINIMUM do not even bother. The stress is not worth it. Trade 4 lots to start - forget this math yadda yadda yaddda
It's the concept. Choose something you are comfortable with. It's probabilities, not certainties. The name of the game is to avoid risk of ruin and the two things that will take you out of the game are your risk and your exposure.
These guys are buffoons if they think and suggest to other people that they should max out margin day trading futures where the notional value is many tens of times the size of their total equity. For example, lets look at today. Some doofus with $6000 margin who went long 1 ES contract this morning just got taken to the woodshed by end of day today.