if you had to start over...

[darthtrader 10]

how would you setup your first index futures account/strategy/risk management/position size/profit target?

 

i just closed out my last swing trade today so should be getting setup in the next few weeks. i'm looking to open a $5k tradestation account. trade YM, 1 contract.

i have been thinking a 10 point stop, 20 point daily profit target. do those sound reasonable? I would like to then add in another 5k to the account once i'm consistent to be able to scale with 2 contracts.

 

any general mistakes anyone made they would like to share that might be able to avoid?

 

also, did anyone not blow up their first account? I realize that may be a given on this account.

[Guest cooter]

LOL. Those who don't admit that they didn't blow up or nearly kill their very first futures trading account must be world-class traders by now.

[weiwei 10]

darth trader, those are reachable goal on YM. but TS execution plateform, in my opinion, is not scalper friendly.

 

So make sure that you master how TS execute, and be comfortable with it.

[darthtrader 10]

thanks guys, great to hear 20 points is a reasonable goal.

Cant say how much I love this board already. Other boards ive been on it feels like I know more than the posters, on here I know absolutely nothing.....

[weiwei 10]

darthtrader, one way to get a feel of a market is to find out its daily average range.

 

It can be easily done with Excel after you imported the daily OHLC data.

 

It will then give you a view on if what you asking is realistic or not.

 

For YM, it puts in about 80 points a day. So 20 is not too much to ask. IMHO.

[Guest cooter]

darthtrader, one way to get a feel of a market is to find out its daily average range.

 

It can be easily done with Excel after you imported the daily OHLC data.

IMHO.

 

Why not just use Wilder's ATR on a daily chart?

 

Average True Range - Wikipedia, the free encyclopedia

[weiwei 10]

Cooter, that is ATR. as for me I am only interest for daily range for scalping purpose, which is (High - Low).

[The Bear 10]

how would you setup your first index futures account/strategy/risk management/position size/profit target?

 

i just closed out my last swing trade today so should be getting setup in the next few weeks. i'm looking to open a $5k tradestation account. trade YM, 1 contract.

i have been thinking a 10 point stop, 20 point daily profit target. do those sound reasonable? I would like to then add in another 5k to the account once i'm consistent to be able to scale with 2 contracts.

 

any general mistakes anyone made they would like to share that might be able to avoid?

 

also, did anyone not blow up their first account? I realize that may be a given on this account.

 

I think it's very doable with a 5K account, but just stick to trading 1 contract for the next year. I checked my records for you, in my first year as a speculator I had a drawdown in the account of 8.2%, so according to my records I did not blow up the account, this included commission fees. This was mainly trading the YM short term. That was about 300 round turn trades. If you are disciplined, you can minimize blowing up any accounts the first year.

 

Don't get obsessed with making money or your 20 points per day. If you can break even in the first year or two for futures (including commissions), you probably have a bright future.

[BlowFish 10]

how would you setup your first index futures account/strategy/risk management/position size/profit target?

 

i just closed out my last swing trade today so should be getting setup in the next few weeks. i'm looking to open a $5k tradestation account. trade YM, 1 contract.

i have been thinking a 10 point stop, 20 point daily profit target. do those sound reasonable? I would like to then add in another 5k to the account once i'm consistent to be able to scale with 2 contracts.

 

any general mistakes anyone made they would like to share that might be able to avoid?

 

also, did anyone not blow up their first account? I realize that may be a given on this account.

 

They sound like pretty good ballpark figures. Certainly not totally un-realistic expectations that some have.

 

I have never blown up an account though I have suffered the thousand cuts...it just hasn't resulted in death. I guess one thing I was pretty good at was realising fairly quick when things weren't working. It doesn't take that much to see your account is steadily going down rather than up. I have still managed to do reasonable damage to a couple of accounts though not managed a real spectacular blow up.

 

They say that once you have enjoyed sustained success you become vulnerable to blow up again. Over confidence I guess. I'm looking forward to blowing one of those multi million dollar babies (again expecting that I will pull the plug somewhere between 25%-50% drawdown).

[bakrob99 11]

Your 10 pt. stop loss is a little tight ... if you are trading the YM 10 points means you have to be quite accurate in your trading entry... whereas 15 points will keep you in more potentially winning trades. My system uses 15 points hard stop and is currently running at 88% win/loss ratio. That means it hits its 1st target 88% of the time before it hits 15 points against. I have found 15 points to be more profitable than 10 but mostly because I only get stopped 1 in 9 trades.

 

Also - trading on TS ... you can use limit orders to enter to ensure the right price and avoid "chasing" ... exit on tick extremes or pivot levels with a market order ...

 

BY the way - if you add a contract every time your account grows by the minimum amount to add a contract ... and keep doing that - you will make well over $1.0 million within 6 months ASSUMING you acheive 20 points per day (the actual amount is much higher)

 

Good luck.

[Nick1984 10]

WOW 1 million dolla!!!

 

Wheres the nearest bank, I can't wait to turn my 5k margin loan into a million into 6 months! Why has nobody told me this before!

 

Screw university, who needs education, we all need 20 points a day weeeeeeeeeeeeeeeeeeeee.

[Guest cooter]

20 YM points is what?

 

2 points on the ES?

 

2 points on the Ags - ZC, ZW, and ZS (CBOT Corn, Wheat and Soybeans)?

 

If that's the case, I should be a millionaire several times over by now

 

LOL

[ItalianSharp 10]

I don't think it's a good idea to have a fixed profit target or a fixed stoploss. I used to do that but didn't have much success with it. I've started to become successful since I got rid of all those fixed numbers, risk/reward, etc...and adopted a more flexible mind instead...

 

Basically, today I am more focused on the markets, the order flow, etc...rather than ratios, targets, stops, etc...

[bakrob99 11]

So Cooter

Can you honestly say that you make 20 pts x All the contracts Traded Every Day on the YM (or equivalent 2pts ES)...

 

Every Day ?

 

If so ... what keeps you from increasing size as your account grows?

[Guest cooter]

Don't trade the YM, so I can't speak to that.

 

But since I do trade the grains....2 cents is comparatively easy (same as 2 pts on ES).

 

The hard part is NOT giving it all away.

 

That's what keeps me from exponentially increasing size on my account.

 

I'm at the point where I can afford to "keep it simple" and enjoy whatever the day has in store for me.

[darthtrader 10]

thanks guys, good food for thought.

 

i'm certainly not a get rich quick type, i actually read books for a year before i felt i could even place my first stock trade.

 

i guess i will have to see how it goes with a 10 point stop. with this first 5k account i will be looking to get max screen time as opposed to making money. i'm kind of hoping the 10 point stop forces me to only take the best entry point and then 20 points and out will force me from giving things back on a winning trade. I will explore 15 though.

 

i guess market orders must really suck on TS. would it make more sense to open an account with another broker along with TS? turn 10 trips a month on TS then use the other broker after? is it really that bad on TS? I have heard so much negative stuff about TS as a broker.

[ItalianSharp 10]

thanks guys, good food for thought.

 

i'm certainly not a get rich quick type, i actually read books for a year before i felt i could even place my first stock trade.

 

i guess i will have to see how it goes with a 10 point stop. with this first 5k account i will be looking to get max screen time as opposed to making money. i'm kind of hoping the 10 point stop forces me to only take the best entry point and then 20 points and out will force me from giving things back on a winning trade. I will explore 15 though.

 

i guess market orders must really suck on TS. would it make more sense to open an account with another broker along with TS? turn 10 trips a month on TS then use the other broker after? is it really that bad on TS? I have heard so much negative stuff about TS as a broker.

 

It almost sounds like it's an easy task to scalp 20 pts off YM...

 

Sometimes I have to sit into trades for 20-30 mins only to scalp 5-6 ticks...I wish I had the opportunity to make 20 per each trade...I'd be a millionaire within a year...

 

From what you are writing, I think you'd be better off demoing for a few months before losing any money. You're going to lose money anyway, but at least you'd have a better idea of what you are doing.

 

A fixed target /stoploss might be too big in some days and too small in other days. Focus on understanding the market as much as you can. It takes time but it's the best thing you can do.

[Fibtrader 10]

Darth

Here is what I would do. I can almost gurantee you will blow out a 5,000 account. Trading with one contract will not net enough profit to make up for the stop losses. You should not risk more then 2% to 3% of the account on any trade. A 5,000 account will only allow a stop loss of $100.00 to $150.00 for the entire trade (if two contracts, $50.00 - $75.00 per contract). The market will hit those stops frequently resulting in losses that could have been avoided if the account was funded properly. A 2% to 3% stop loss on a $20,000 account allows a $400 - $600 stop loss. The end result is more contracts being traded. With two or more contracts you will make more money in less time (eliminating the time exposure factor). You won't be able to swing trade a $5000 account, too much time exposure and not enough of a stop loss. NEVER... risk more then 2% to 3% of your account no matter how large it is. I speak from experience, having blown out my account before I got smart.

If you want to trade a $5000 account get the free simulator from http://www.NinjaTrader.com This will force you to take trades in real time so you can't cheat . Don't risk real money until you can trade "funny" money profitably. The simulator will track all of your trades in its account manager. Make sure you set up the simulator account with $5000. I think it comes set up for a $ 20,000 account. Trade the simulator account exactly as you would a real account. Make sure you set hard stops to keep your losses small, pick a target to get out at and let the market take you out not your emotions. Remember if you are afraid to lose you will never win in the market. If you use Tradestation I would recommend the Market Profiler available on this website. Some platforms offer MarketProfile (eSignal), Tradestation does not, unless you have this add on. The one on this website works very well. I won't trade without it.

 

Good Trading

 

Fibtrader

[BlowFish 10]

Fib welcome to the forums, I am fairly new here myself but its a quality venue.

 

Isn't the YM 5$ a point? that would allow 10-15 point stops @ 2-3% (if my quick mental arithmetic is not out - it often seems to be nowadays).

 

The 2-3% rule is a great rule of thumb that people quote to keep other people plunging in the deep end and drowning in a fairly short time. It goes hand in hand with "conventional wisdom" that you should pursue something like a 1:3 risk reward. The key thing really is risk of ruin and the amount at risk on each trade is just one component of this. Obviously if you have a higher percentage of winners in comparison to losers you can put more at risk on each trade without increasing the overall chance of ruin.

 

Ironically one of the main ways to increase your percentage of winners is widening your stops (in comparison to your target). As you quite rightly point out having stops that are too tight can reduce the efficacy of any method! I linked this in another thread TradersCALM - risk of ruin menu talks about RoR far better than I could.

 

Cheers,

Nick.

[rolange 10]

how would you setup your first index futures account/strategy/risk management/position size/profit target?

 

i just closed out my last swing trade today so should be getting setup in the next few weeks. i'm looking to open a $5k tradestation account. trade YM, 1 contract.

i have been thinking a 10 point stop, 20 point daily profit target. do those sound reasonable? I would like to then add in another 5k to the account once i'm consistent to be able to scale with 2 contracts.

 

any general mistakes anyone made they would like to share that might be able to avoid?

 

also, did anyone not blow up their first account? I realize that may be a given on this account.

 

Quite by coincidence there is a similar question on ET

 

http://www.elitetrader.com/vb/showthread.php?threadid=94282

[darthtrader 10]

thanks for the Elitetrader link. In all honesty since finding this board elite has become quite hard to read. so much garbage to sift through and seemingly angry responses, like "go flip burgers" in that thread posted.

 

I was actually look at the ninja trader the other day. something that looked interesting is the replay function. is it possible say replay the day and paper trade at 10pm for practice?

 

I'm sure I will paper trade for a bit when i get going but I didnt really get much from paper trading stocks.

 

also, have any of you backtested your setups with different stops? that is something i will be interested in checking out once i get going.

[The Bear 10]

I too never got much from paper trading. I like to put a little something on the line to make it real.

 

Regarding Tradestation, I've used it quite a bit and it works fine for trading 1 YM contract. I rarely get slippage on the stops (STOP MARKET), maybe 1 tick of slippage on 100 trades. I use limit orders for entry and it works fine.

[bakrob99 11]

Darthtrader

 

ESignal has a tick by tick replay function so you can replay the day later on ... TS does not.

 

I have traded TS using 1 contract and market orders and found it quite difficult to consistently make money. Main reason - you really need to be able to scale out - so my advice would be to find 1 (just one) setup that works for you and trade it using a simulator for a while - then when you start trading for real use at least 2 contracts and scale out of the first at a point that your entry hits it 75% of the time before it hits your stop loss... then let the other contract run.

[Guest cooter]

I too never got much from paper trading. I like to put a little something on the line to make it real.

 

Regarding Tradestation, I've used it quite a bit and it works fine for trading 1 YM contract. I rarely get slippage on the stops (STOP MARKET), maybe 1 tick of slippage on 100 trades. I use limit orders for entry and it works fine.

 

For trading energy contracts though, how does this work out for you?

[The Bear 10]

I've maybe done 50-100 CL (1-2 contacts at a time) trades in the tradestation account, and I've had 1 tick of slippage on 2 separate occasions. In my opinion the order entry system works well for what I do. I Don't use the tradestation account for gas trading, but my records show I had 1 tick of slippage on a mini natural gas trade for 1 contract. I've maybe done 20 mini gas trades in it. It also worked fine.

 

Here and there I get slippage of 1 tick on my exits but it is in my favour (limit orders).