Micro E-mini Madness (2% per day)

Discussion in 'Journals' started by sstheo, Aug 19, 2019.

  1. sstheo


    SUMMARY: For the next 6 months, I am going to try to earn 2% per day using the new CME Micro E-mini contracts. My goal is to safely grow a small $1,000 live account up to $10,000. I propose that "the micros" are the way to go for all new traders and those that have small accounts. Using the regular Emini's is just suicide if you have less than $10k in your account, and while using TST and many other funding companies might be good for some traders, for most it can lead to a vicious cycle.



    Grossly Underfunded

    I talked with the representative of a large brokerage, and he admitted that traders flame out and get margin calls all the time. But he said that their clients with larger balances actually last longer in the markets. This was a great epiphany for me.

    While it makes sense that it should take them longer to wipe out because they have bigger balances if trade sizes were consistent between small and large accounts, you would also think that they would take proportional risks like the lower balance traders, so they would end up being equal. "Not so!" said the broker.

    The higher balance trader has more breathing room. They have more time to play the game before their capital is gone. Because they have more time, they become better traders faster. Emotionally, they can take small losses and not generate one drop of sweat. What a great place to be!

    On the flip side, the "underfunded" trader has significantly more emotional risk per trade. They "trade scared." Each loss is a bigger portion of the overall account. And the underfunded trader can never trade more than one position at a time, which mandates almost PERFECT entries and exits in order to grow the account, unlike the professionals who are scaling in and out all day long.

    Evil Seeders?

    Enter the funding companies! True prop trading firms, and then companies like TST, OneUp, LeeLoo, E2T, are now offering traders a way to have big accounts with little risk. So the problem is solved! And newly minted millionaires are buying yachts on a daily basis . . . . Not so fast. Trading is a bit harder than that . . . .

    Most traders still fail, and these companies have earned the name "combine mills." It seems they all make most of their money with monthly subscriptions fees, not with the 20% they get to keep when a trader is successful. What is going on?

    Most funding companies charge a recurring monthly fee and offer "resets" for a reduced fee. Lured by visions of free money, the newbie trader gets sucked in to a viscous cycle of death by degrees. I have talked with many traders who are stuck in this cycle, and have my own embarrassing firsthand experience. I have spend over $9,000 between TST, OneUp, and LeeLoo. Ouch.

    While these companies need a way to find good traders, the ROI needed to pass the evaluations in one or even two months is completely unsustainable. On one of their account sizes, OneUp, for example, requires a $9,000 profit, but the max draw down is $5,000. In one month (20 trading days) this works out to $450 per day or 9% growth per day on available capital. This is equivalent to 2,250% growth per year. Say what???? And if the trader takes two months, it is still 4.5% per day. And because (rightly so) no one wants to pay the monthly fee, they take risky trades and repeatedly blow their accounts. They should really be taking three or four months to reach these targets. Ironically, you would think that the seeders - while trying to build profitable long-term traders - would promote less risky behavior. Not so.

    I actually think these funding companies are offering a good service for experienced traders who already know how to trade. But except for the rare anomaly, they certainly mean a slow grinding death for newbies. On the bright side, perhaps this is still better than losing $5,000 to $50,000 of your own money on live futures account while you try to figure out the basics of how to begin to be consistently propfitable in the markets.

    Micro E-mini's to the Rescue!

    People have been petitioning the CME for many years to create a micro version of the E-minis, and this year they finally arrived. And I think they solve many of the problems that new traders have.

    While the "bang for your buck" ratio is just half of the their E-mini brothers, they are still awesome. While a reasonable round-trip rate for the E-minis is about $4.00, the fee for the micro is about $0.80. So this is 1/5 this cost, but only 1/10 the size. Clearly this is relatively expensive. However, if the micros are used for non-scalp trades and even swing trades, they can be a great deal.

    One of the exciting things about the new micros is the margins are only $50 to $100, so you can play like a big trader and finally learn how to scale in and out. The best traders usually take the bulk of their positions off at the first target but then let their winners run. And with an overnight margin of about $500, you could even do a swing trade and not get stressed out.

    The purpose of the new Micros is to be a tool for newbies to safely build up to the E-minis, and the high daily volume in just a few months has caused the CME to declare these their "best product launch ever."

    My Micro E-Mini Journal

    This journal is my public accountability record for my tiny live $1000 account with AMP Futures. I want to show how "small" traders can become big traders if they have patience and are realistic. I want to show that trading the micros is the proper way to grow a tiny account and (1) not taking on too much risk by trying to trade a regular E-mini contract and (2) NOT use funding companies and getting stuck in a seemingly endless cycle of combine fees and resets.

    My goal is to earn an average of 2% per day on a $1000 live account. Some reading this may call me "mad." I accept this. Hence the name of my journal, "Micro E-Mini Madness!" But come back often anyway to see how I am doing. I promise full transparency. You indeed may be right, but I will give it my best shot anyway.

    2% per day is just $20 per day starting out. $20 with the micros is like $200 with the regular E-minis on a per-tick basis. And everyone who trades the E-minis regularly knows they can get $200 per day many days. The trick of course is discipline and consistency and not having big draw downs.

    When the CME kicked off the micros, they hosted a micro trading competition. Out of 1,400 entrants, I came in 13th place. So my confidence is high that I can pull this off.

    Click here to see the attached official final leader board.

    CME Final.PNG

    My public goal is to get from $1,000 to $10,000 in 6 months using just the micros.

    Once I reach $10,000 then I will switch to the regular E-minis and keep going. Using a spreadsheet, I have run the 2% growth out for 250 trading days. If I keep my goal at 2% average per day for the the full 12 months I will reach $100,000 on day 234. Obviously 2% per day is not infinitely scalable, but for 12 months I am going to give it my best shot. After that I will reevaluate and probably shoot for 1%.

    I would love for you to follow my progress, and maybe even join me with your own Micro account.

    Let the fun begin! I will start in the next few days.
    Last edited: Aug 19, 2019
  2. gaussian


    This one is interesting to me because I've considered this myself. The e-micros seem fun as a casual trading experience. You can stock an account with ~$2000 and give them a go without overleveraging.

    Additionally since they track their parent e-mini index absolutely you can use all the data from say ES to trade on MES.

    2% per day isn't sustainable I don't think. You may find it's easier to hit weekly or monthly targets. Some days you'll catch a home run and let it run, some days you'll hit your risk limit and have to walk from the table. If you were able to achieve something like 5% per week that'd be pretty incredible by itself.
  3. R1234


    I am an early adopter of the EMicros. Began trading all 4 contracts few weeks ago. Gotta say I love the ability to scale in/out and the fine tuned exposure scaling is awesome.
  4. pinabetal


    Hey I might join you with this but say with 600 dollar trying to make 2% per day. What you are saying is 2% on your balance at the beginning of each day correct?

    And this will be day trading? Only RTH’s or overnight session too? Flat at the end of the session correct?

    Or are you saying 2% of my original 600 which would be 12 dollars profit each day after comm? Regardless of my daily balance. Just try to make 12 bucks a day?

    I think you must mean 2% of my daily bal at the beginning of each day? That seems to be the only way 1000 could get to 10,000 in six months.
    sstheo likes this.
  5. sstheo


    I loved the way you said "casual trading experience." I think this is the key to successful trading across all markets. I know a few really successful traders, and they often say "so what if my stop gets hit; it is just a game. You win some and you lose some. Overall, I know I will win, but I don't get invested in any one position. I take my losses easily." That attitude is what allows them to succeed. One of them made over $8000 last week on one day trading 6 ES contracts at one time. WOW. His account is large enough that he can think clearly even with all the potential downside with a position this huge. A $1000 micro account is like a $10,000 E-mini account. So I anticipate having the same "casual" trading attitude.

    Regarding the daily goal, I meant to say "2% average." I expect that I will have many losing days, but I also expect to make as much as 3 or 4% on some days when I am in tune with the market.
  6. sstheo


    Glad to hear it. I have never had the ability to try true scaling on a live account before. I have been merely a "scared trader" who has (fortunately) done well with one contract at a time. My winning ratio is about 90%. But I miss a lot of big moves. With one position, there are no runners!
  7. sstheo


    CORRECT. Compounding is the only way to reach the $10,000. So I will target an average net profit of 2% of the beginning balance each day.

    I think this is can be done if I don't allow my bad trades to knock me too far off track. (i.e. holding on to losers). If I take my losses quickly and move on to the next trade I should be fine.

    I was going to do another post with my account rules, but since you asked --Regarding the trading hours, I am actually going to allow myself to trade pre-market and then the full NY session if necessary to reach the goal. But I prefer to be done by 11:30 Eastern Time. The Asian session is too erratic to trade well with the low volume.
  8. pinabetal


    Yea i was wondering how losing days would affect your compounding. You must be treating the compounding to reach 10,000 in six months without factoring in losing days?
    sstheo likes this.
  9. pinabetal


    Do you know what AMP charges RT per contract?
  10. pinabetal


    Are you going to trade 1 contract or use scaling in too?
    #10     Aug 19, 2019
    sstheo likes this.