Making a living with a $30K account

My friend says start with one contract.

 

1. I didn't say he didn't have a margin account. I said he didn't USE margin, only available cash.

2. I agree, and that's what I've been telling him

3. Yes

4. I wish I was there, but no

 

He has a method he's comfortable and successful with.

 

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Seriously in that case he should start off with 1 es contract and see how well he does always keeping his losses small.

 

If he is making 60% returns, why not use the 4x daytrading margin? With futures with 30 k and 10 contracts he will be trading on 25:1 margin in a lightning fast game filled with pros.

 

Sounds like he's made up his mind already. Good for him.

I don't see why he can't do it.

 

That's one option. Not sure about the "filled with pros" comment, what's the difference if he trades the SPY or the ES?

 

25:1 margin is suicide

 

You're friend hasn't factored in the pschological issues he's going to have with using such a highly leveraged trading instrument as the E-mini's, when he hasn't been using margin at all.

Futs are a completely different animal from stocks, trust me.

Have him do this:

$30 @ 10 cotnracts = $3,000 per contract.

Trade with 5 contracts only ($15,000).

Step 1: Build those 5 contracts into 10 contracts (leaving the $15,000 in reserve - very important).

Step 2: Build those 10 contracts into a years worth of salary in the bank, net.

Step 3: He's ready to leave his job.

If he can't do the above, exactly as I've stipulated, then he isn't ready to do it. If he can't turn the 5 contracts into 10, he isn't ready to trades futs (but fortunately, he will still have the $15,000 in reserve to do whatever else he wants to). If he can't put a year's worth of salary in the bank, as a financial and psychological cushion, well then most definitely isn't ready to leave his job.

Good trading,

JJ

 

That's very good advice, thank you.