How much margin is "safe" is largely a function of skill level and trade plan but $500-$1000 per contract is extreme under any conditions.
The major factor is overnight hold....these low commissions are geared towards day traders and scalpers.
Well, here’s my point: even IF (big if) you could enter a flat price outright directional entry in ES for $500-$1000; WHY WOULD YOU? Your emotional state entering a trade would be so compromised, so fragile and so conditional; and I’m not even going to talk about position management... Trading is about making good risk vs reward decisions. IMO that environment cannot exist with a gun to your head.
If you are trading automated or semi-automated, it's not a problem....the emotional aspect is pretty much eliminated.
I used to think the same. $500-$1000 margins for eminis is very imprudent from a money management point of view. Unless you have a super high win rate with very small losses, that is too risky. Doing some simple math and looking at price movements, one can see that using $500 margins on a small account with large number of contracts will result in blowing up in due time. The risk of ruin is almost certain. Some people will say but but but I'm really careful. haha. Sure. Anything can happen in the market. Today I did strength training. I've added strength training into the mix of cardio and yoga. It's amazing what a consistent exercise program can do for your body and mind. I've always eat pretty healthy and lead a healthy lifestyle(i.e. no smoking, very little to no drinking,etc.). But cardio, yoga, and strength training is taking me to the next level. Also the discipline of doing these things daily has also helped me in trading. It reinforces the discipline. The bad habits of trading past is basically gone. And it's not that countertrend trading is bad. I did several a few days ago successfully. It's knowing when. When to enter, when to exit. When to add size. Anyhow, things are crystallizing and hopefully I'll get enough confidence and data so I can scale. “You must give up the life you planned in order to have the life that is waiting for you.” ― Joseph Campbell
Lately I've been executing according to my process. It feels so good to go long exactly as I should and short where I should. I know this might sound too exacting but I like to be within ticks of my setup patterns. When I do get it just right, it feels great. But I'm OK if I don't hit exactly as long as directionally I'm correct. In my non-trading biz, my recent project with a client ended and I have some dead time to practice trading some more. Since I've been improving every day, a thought crossed my mind maybe I can scale up or do FT. *Gasp* But then a new client project showed up. I'm going to pick up the new client project and continue to trade on the side(a few hours in the morning before work). I'm patient. While I've been really consistent and improving steadily, I still feel I need to hammer down those good habits until it becomes automatic. I'm OK if it takes a few more months(maybe another year?) of practice to hone these good trading habits. I see this as a long-term skill development. The stability of consulting income can't be underestimated. It gives me peace of mind as I refine and refine and refine as I get better and better. A good criteria is if I make more than what I make in my consulting biz then I might consider doing FT. Right now, I'm not there yet. So no go. Improvements are great. But I want to prove to myself with real solid results. And I know those solid results are coming since I've been focusing on improving my process and trading habits. Once those are consistent, then it's just a matter of steadily scaling it up... That's the beauty of this game. One must have Patience to play the long game. Put the odds on your side. Not the odds stacked against oneself. The stress of not having a steady income source can put one's trading plan in danger. And we all know no matter how good you are there's always a losing streak lurking somewhere around the corner. It might not be a big losing streak if you control your losses. But it's added stress if you have expenses to meet. Play it safe. Unless I'm so consistent at making large sums of money on most days that it's actually costing me more to NOT trade... One day I'll get there..
%% I have a printed stock chart of Extreme Networks; it got stuck years ago@ $12. So i enjoyed that chart with out trading/investing it, again LOL. Its about $8.88- not a stock tip .......
Today is my off day from my consulting biz. I had a routine doctor's checkup appointment in the morning. I traded at the open. Made a little. Nothing to write home about though solid. Then I came back from the doctor's appointment it was mid-day already. I said what the heck. let me check the markets. Put on a few trades and I wasn't even trying too hard. Traded ZW(wheat futures). Made in an hour of trading ZW more than what I would have made an entire day doing consulting. hehe. Not bad. Maybe I will hit that criteria sooner than I think. But this will not deter me from continuing my consulting biz. Just need to consistently do this for a while before going FT. Or if ever. Why not have the best of both worlds?! Stability of income plus the upside of trading on the side.. Progress. To be clear I was trading 2 lots per account. I have 3 accounts. So effectively I was trading 6 lots without even thinking about.
Leading a double life =============== Just had another good trading in the morning. I feel like I lead a double life. Thanks to my timezone, I get up early and do my exercises. Then trade. Then go to work. On good days, I make in one hour what I make an entire day consulting onsite. On other days, it's down or flat. Just need to keep up the positive momentum. Hopefully over the long run, the positives significantly outweigh the negatives. When I'm onsite at a client's office and working, I feel like I have been transported to another place. Trading was a battlefield with volatility. Slaying the dragons. Then at work, it's just a normal white collar professional working and analyzing data away. Do part-time traders get this feeling that you are leading a double life? hehe