The start of the plan for S&P

Discussion in 'Index Futures' started by Allen3, Sep 6, 2007.

  1. Allen3


    Recently I figured out I had started to work on the middle and end game before I had the beginning of the plan in place. THAT MEANS MONEY! I had enough to open an account and trade several emini S&P futures contracts, but it wasn't really money I could afford to lose. So the question is when do I meet the criteria to trade? I've read dozens of books and articles. The advice ranges from if you have a good system just a small account, a few thousand, is enough to....Have a $100,000.00, One million in the bank, prepaid college tuition at a private university for all children and one extra just in case, a paid off house, a bunker supplied with food for 10 years.................................... ! Where does it end? What is a reasonable compromise between being prepared and taking the risk of starting in this new business?

    Please (REASONABLE PEOPLE ONLY) give some info on the beginnings of your career in trading index futures. You don't have to give a life story or divulge any secrets. I just would like a reasonable consensus view on where some others started. preferably people that have been successful for a couple of years, but it would also be interesting to know what some contemporary beginners are starting with and expecting to be successful.

    Well there it is. It may be boring, but it's where I'm at. If some of you would see fit to post your beginnings, it may help or save some other poor soul who has come to the market. Thanks in advance.

  2. Until your MIND is right, you have nothing to start with..a car without an engine.

    In the beginning I had incorrectly worked with platform after platform and chart after chart....while the whole time had ignored the way I think (everyone has this weak link in the beginning).
  3. The most important issue is whether you can "handle the market". Suggest you paper trade* with discipline and critical review (no fudgies just to make yourself feel better... the market is a brutal arbiter of everything).

    Once you're CONFIDENT you can handle the market, start small. Build your capital on success. Then increase your trade size.

    If you can REALLY handle the market, you can start with $5K-10K and the rest will come. It's a lonnnng journey. Try to be patient, disciplined, consistent.

    * Paper trading will reveal flawed strategies. But even if your theoretical results are outstanding, it will NOT be a harbinger of success. One of the most important factors is the psychological impact of financial risk... absent in paper trading.
  4. <i>"Well there it is. It may be boring, but it's where I'm at. If some of you would see fit to post your beginnings, it may help or save some other poor soul who has come to the market. Thanks in advance." JIM</i>

    Regardless of what method - system - approach you start with, money in the bank is immaterial. Every trader needs to begin in pure demo mode, mock trading only.

    No it's not (double negative, ouch) the same as trading real money. Not by a country mile... the difference between those two is vast. However, nobody has ever made one dime of real money that couldn't first do better in demo mode.

    A lot of guys print money in demo mode but stumble with real cash at work, granted. That does not negate the fact that lots more stumbling around in demo to learn many real lessons with play money is important.

    Many, many, many fledgling careers are busted flat and killed by suffering early losses of precious capital that could have been avoided. Not all loss is avoidable, but many if not most are by learning the ropes in simulation.

    Hope this helps
  5. It is impossible NOT to lose precious capital in this business. It is far better to learn the ropes by trading real money in small size, almost laughably small size.

    The old traders from a century ago like Wyckoff suggested trading only 10-20 shares of a stock, at first; and then increase the line over time once trading proficiency had been achieved. I would agree. For those who trade futures like the S&P e-mini, there is always SPY. And odd lots for those who trade stocks are not a problem.
  6. xiaodre


    First, you will probably want to decide how much money you want to make on how many trades per day, week, or month, and how much you want to risk to make that money. This goes into how much money you require to live on. If you are treating this as a proper business, you will want to make a living doing it, more than likely. :)

    I guess the next place to start would be to start an account with a broker, someone like Interactive Brokers who will give you a data feed for $10 a month or so. Then, get your computer, internet connection, charting software, and front end software together.

    Then, spend the next few months on a trading simulator (your front end will probably have one) and looking for a strategy that has a positive expectancy and will generate the kind of rewards you want and, once you have found one, following it religiously.

    Then, once you have mastered this strategy your simulator with the live data feed, well...

    Of course, there's alot more to it than just this. But, finding all the nooks and crannys is the fun part!

    Good luck!
  7. Allen3


    All this advice is solid and appreciated. I fully agree with the mock trading learning curve, I know I have to get my mind right about things, but is your advice that your financial situation doesn't come into play. I've seen alot of post where people after the fact attack some poor slob that has nothing left for getting into trading with the wrong financial foundation. Are people just trying to separate themselves from that loser that puts them on the attack about his or her finances at the beginning.

    An Example:

    Trader #1: Starting balance $10,000. Thinks he has good system. Works it well. Builds his account into a business that more than pays for leaving the job he did. Yeah, pat on the back you had the right mind set. You were prepared. One of the elite that knew what they were doing.

    Trader #2: Starting balance $10,000. Thinks he has a good system. Works it well. Slowly loses his capital. Can't make ends meet. Comes in here to find comradery. Is told he had no business starting trading. Is worse than a brainless donkey. What was he thinking to have put his life and family in jeopardy. Must lost his mind. Idiot!

    Is the only thing that separates them luck? Is that the reason people attack with the you weren't prepared crap? Is the only thing that separates the good from the bad, luck at the beginning? Does everyone that does this trading thing just jump in and maybe destroy their life? Is that why people are so vindictive in here? Because there really wasn't anything in their preparation that gave them a good chance, it just work out that way? That their ideas and system gave them enough success at the beginning to let them keep going?

    I'm really interested now in what people started with. Here I'm thinking I'm stupid to think I can start with nothing and get somewhere, but so far no one has told what base financially they stared from. Perhaps there's a luck line out there and you take your shot and hope your on the right side of it. Plenty of money or not.

    Maybe the responses I'm getting are the answer to my query. That pretty much everyone who starts trading has no financial business starting, they just make it through. If that's true, why do they spend so much time and effort beating up people for not preparing financially for trading?
  8. Started with $25/mo on a bank draft into Templeton Growth Mutual Fund... learned about the markets and trading... increased scope over time.
  9. Allen3


    Thanks. That info combined with your previous post is what I want to learn about. I feel I have a tendency to get ahead of where I should be. Your progression makes sense to me. I really appreciate your time.

  10. bighog

    bighog Guest

    Want to know when you are ready? Think back about getting your first jump. You keep moving in on her, you see how her vibes are going, then you get ready to strike. Now how hard was that? Try the same with trading, slip the bone to the mkt and have some wild times.

    The good news is the mkt will not get a little pg. .. :D
    #10     Sep 6, 2007