I'm a stock trader and know nothing about futures (and have no intention of trading futures). I met a guy at one of these trader hookups in my hometown last week and he said he traded the ES, 5 contracts at a time, and averaged between 4-6 points a day. Sounds impressive but I have no idea what it really means and didn't get a chance to talk to him anymore. How much money is that per day? And if he's so consistent why doesn't he scale up to say 10 contracts a day? And lastly, is that impressive? Do most good traders average the same amount? Or is it complete bs? tia.
Can you be a little more specific please.... how does it work -- how many $$ per contract per point on the ES?
1 ES point = $50.00 ....so, X's 6 points per 1 contract that is $300 with only 1 contract...if he is doing 5 contracts...that is $1,800 per day....very good...the ES is the emini SP 500 futures...the highest volume of all mini index futures
say ES is at 1450...then goes to 1455...that is 5 ES points...or...$250.00 profit if bought long...per 1 contract..excuding commissions etc..
Tx for your answer. So if the ES is so liquid, and the guy is consistent, why not do 50lots? why always do 5?
because with futures you have unlimited risk...you need to put up margin to trade futures and can have unlimited risk...
Liquidity isnt an issue, if you can trade 5 lots, 50 lots should be mechanically the exact same (no slippage). My guess is either this guy is just content with his current level of earnings or he tried sizing up and, even though the trades were the exact same, he couldnt trade size the same way.
There's a different mentality to trading 5 vs. 50 vs. 500 lots. In theory, it's the 'same' but as Steve said, the psychology of 'so much on the line' could be too much for some people. Make no mistake, trading 5 lots every day and making 5 pts a day is a nice little gig for most people. It could simply be a comfort thing. Trading 5 results in great returns, trading more results in some bad decisions. I think you'd be hard pressed to find too many guys upset with making $1250/day, $6250/wk, $25k/mt or $300k/yr. It could just be about comfort. Some people settle into a comfort zone and want nothing to do with anything outside that comfort zone. And if the zone is making $300k/yr, not many will push the envelope even further.
I would like to know how long he has been trading the ES at an average 5 points a day. A $20,000* account is all you need for those five contracts and $1250 per day is a huge return. *IB's margin requirements for the E-MINI S&P 500 Intraday - Overnight $2250/$1800 - $4500/$3600