After reading the New and "Enhanced" Risk Disclosure from a mid-size FCM, a daily sweep seems to be a valid and prudent operating procedure to consider. 6. DEPOSITED CASH AND PROPERTY You should familiarize yourself with the protections afforded money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specified legislation of local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall. Customer funds are not protected by insurance in the event of the bankruptcy or insolvency of the FCM, or if customer funds are misappropriated. Customer funds are not protected by SIPC, even if the FCM is a Broker Dealer registered with the SEC. Customer funds are not insured by a Derivatives Clearing Organization (DCO) in the event of the bankruptcy or insolvency of the FCM holding the customer funds. Each customerâs funds are not held in an individual segregated account by an FCM, but rather are commingled in one or more accounts. FCMs may invest funds deposited by customers in investments listed in CFTC Regulation 1.25. Funds deposited by customers may be deposited with affiliated entities of the FCM, including affiliated banks and brokers.
Only the naive and very ignorant would EVER keep more than the absolute minimum to day trade in a futures account.
gmst and I are saying that a trader's effectivenness and efficiency can be quite low and using a systemmic approach is simple. Say a person makes the same points per day per contract for each day of the week. Actually less is made on Mondays and Fridays but more is made on the interior days. This is because of fear and risk in the industry and traders are parasitic to these things. (see Harris). The following outlines what is going on. 1. A daily cycle using RTH is deployed since there is no overlap of RTH and non RTH hours. (RTH has liquidity and non RTH does not). 2. Carry over ends the RTH and begins the RTH thus continuity is preserved for SA applications. 3. Compounding is done since it is the cardinal money maker. You may have correctly divided 500K by 52 and divided that quotient by 50 to come up with the weekly points. I do not know. 4. Monday begins with original capital each week. 5. Each day has characteristics which provide a yield from a daily catenary of activity. 6. A constant daily effectiveness and efficiency yields the weekly compounding schedule. Do the math. 7. From this you get the weekly take you determined. In summary, the Effectiveness and Efficiency is much less than you think at present. Yes, the weekly is used as a convenient compromize. Those who work understand how an income orientation works. Money is taken weekly and spent weekly. To understand how compounding works make a table of 3 to 9 contracts traded. Add a column that shows the daily take is constant at 1200 dollars. As you see by dividing the number of contracts into 1200 the number of points required per day declines as more contracts are used. The number series looks like 8, 6, 5, 4, 3, 3.5, 3, and less than three. By working at a consistent effectiveness and efficiency with Monday being 5 contracts, it is possible to see that earning 1200 dollars plus costs makes it possible to compound the capital by one contract increase each day. Then a weekly sweep gives an annual ROI of 500K. I posted a trading accounting for this most recently as a simple proof. A guy with a crybaby name faulted it for his reasons. Nevertheless it shows how making 500K a year is done by a beginner with beginner skills and knowledge. My example showed a net of 1312.50 an amount slightly over that needed to add a contract a day beginning on a Monday. For a week of constant performance the capital increase (not including costs) looks like: 1200, 1440, 1680, 1920, and 2160 which has a total. This is swept weekly. Now suppose the person is not a beginner. Then he trades more times a day be cause there are more zero risk and no money management required trades in a day. And it is true that a beginner can forgo an annual income of 500K when he is just out of high school, voc tech, junior college, or an Ivy League or Seven Sisters college or university. Lets say he cuts back to 494,000 dollars ROI, then, by doing this for a week, he can use a capital base of 12,000 dollars and become a millionaire spender the first year of trading. I do not trade for myself. I do not need to. I trade for others who are helping solve local problems as I did when I was a personal trader. My objective in trading is to extract capital from Wall St. and put it to work on Main St. to solve local problems.
I wholeheartedly agree here as well. Working with a partner in a physical room (and not just on a chat or a Skype call), was another one of the large improvements in my performance over the past year. I definitely recommend leaving your house and treating it like a job, it helped me immensely!