If someone is making 300-500% annually on their $25,000 futures account, approximately what is the maximum money amount their account can reach before they can no longer make those kinds of high returns?
well if you short ES at the very top of a bull market and cover at the bottom of the bear market, you can do that with 1000s of contracts and make 300-500% but it depends on your strategy
yes, but the question is, how many thousands of ES can you put on if you start with 25k and make 300%? Let's just assume you buy at the low, sell at the high.
As Recession pointed out it depends on the strategy. As well as the leverage and the liquidity (Or Accepted Slippage). Assuming you risk 2% per trade with 1000 contracts on a liquid ES (5ticks slippage?) : Equity must be at (100*(1000*50))/2=2,500,000
last time I put in a 2 million 5 hundred thousand order on globex it was rejected. Good thing because it was a fat finger mistake. I was just trying to buy 2, 5 ticks below the bid.
OMG, You almost broke Globex (Or your shirt). But if you trade with AMP they offer 400$ intraday margin. So your equity should have been, at least, 1,000,000,000 ... XD Ps: juste made the link with Spielberg XD
I have already tried several times, I am still short from last year with rollovers, have taken first targets twice, but I have gotten a little smarter than when I first started long ago, when the market is blatantly showing support, you better be hedging open short profits. The very best year of my life was 2008 of Crude Oil dropping 115 in six months along with other energies, had 23 losses that didn't find the top. You have to learn to love to lose, and you have to learn how to manage risk better than loving to lose. When I hit the extremes, I can make 55-114k to risk of approx. $1200, it is better odds that trying to get Royal Flush playing Video poker. A 25k account, you be able to have 1 market to trade. But long term trading has years when you working hard to just stay even. Day trading, you best bet is lease a seat for a grand a month, have forgotten what account min is, but you don't really have margin unless you go over night. Fees you pay are decided on how many lots a month. Really is based on lot size of what you trading, I think in opposite terms than most, so if you trade many lots, you will have deeper drawdowns unless you risking/reward in ticks, but if you going for homerun trades, you have to become a stat trader big time, less lots of homerun trades as there are few who have few losses. I know only know two traders who make 10 points in ES often and hardly have losing days, whereas Scalping you taking many trades for less money but have to have low losing rate. Some years easier to get higher percentage points and other years less so, it is not so much what is highest amount of money you have in your account, comes down to how much you can feed into the market and not get really horrible slippage of 10 points, better have something in your Trading Plan to be ready as it will happen. I actually hedge when I day trade, but it is more like already hedged even when I am not trading. Knowledge of how to trade is number one of course, making money is tough enough, but keep it is even harder. I have seen way too many traders lease a seat, they be doing great and something inside of them goes haywire risking way too much on one day and busted. You shouldn't care about percentages, they will just mess you up. Concentrate on doing the same action on each trade, no hurry in building an account, do it the right way and you be able to keep building, but get all hung up on percentages will be a down fall.
This was a big one for me, and traumatic one too, after jumping back into the market after my initial 40% account loss when I first started. I had one hell of a big gap...just couldn't seem to jump back in.
I have had to learn that some days I just can't recover and account wise, best to walk away till tomorrow. You do enough back testing, and then go back to study what you have back tested where most people don't do this, makes a difference cause you should never forget what intense loss feels. If your back testing can show a pattern of this loss and what would happen if you continued to trade, you know the loss is going to hinder correctly trades that day.