Newb to investing qustions needing answers

[bkny1055 10]

First off I would like to say thanks to you guys for having a site like this

I am a NEWB to investing & I have never really done it on my own

I am very much interested in learning to invest Futures, E-Mini S&P and E-Mini NASDAQ

I have some questions that I wanted to know if you guys can answer

1.

What institution do you guys have your accounts with (E-trade, Scott’s trade etc.)

2.

If I wanted to start investing in E-Mini who can I trade with? (E-trade, Scotts trade etc.)

3.

I have an old 401k that I need to roll over but I want to use the money to invest how can I roll it over to an investing company to invest in E-Mini’s? (IRA, Rollover IRA etc.)

4.

I have a total of 4,000.00 in cash and 2500.00 in the 401k to use is this enough to get me started? (heard I should have 20k)

5.

Where can I learn how to invest in E-Mini’s?

I am looking for a newbie from scratch learning place baby steps.

 

Thanks guys

I know you guys have been doing this for years you might be wonder why I am not much more vested and the answer is I never had the guidance needed to get started so here I am looking to get started

 

First I was looking at this in a small way like I want to make enough money in this to pay my car note (300.00) every month but I know there is much more I can make at this if learn properly

[Guest cooter]

1. You need to find a futures broker. Don't go with a stock brokerage to trade futures, if they even support it. They are two different, but otherwise related, beasts. You need a broker who understands what futures trading is all about, especially if you are a newbie needing support to get started.

 

2. Once you find a futures broker, they should have the e-minis (ES, YM, NQ, ER2) available for you to trade.

 

3. This 401K is money that you can afford to lose, right? Roll it over to an IRA, then have a custodian setup the account so that you can trade it with a futures broker. Millennium Trust is one custodian that I've heard of - your broker will advise you if they can support this type of account for you to trade in, and who they recommend as a custodian.

 

4. Again, if it is money that you can afford to part with - certainly. The learning curve for many traders is very steep, so be sure to only use $$$ that you don't mind not having the next day.

 

5. Read this forum from top to bottom. There should be some nuggets of information that may help you get started.

 

Just my two ticks' worth.

[bkny1055 10]

thanks for the quick reply cooter

yes its money i want to use to get the knowledge needed to make money

[james_gsx 16]

It's not easy, and they don't play nice. If you are going to do futures I'd suggest picking up John Carters book Mastering the Trade, and a good book on technical analysis. Carter has some good strategies that may or may not work well with your personality, thats for you to decide.

 

Learn how to read the tape, check out the videos on this site you will learn a lot of invaluable things there. Just remember, you will not be trading the e-minis but you will be trading other traders. They think that way, and you must as well if you don't want to get bullied around and thrown out.

 

 

One other thing, download E-Signal and make sure you can look at the futures. Then create a setup that you like, find out the pivot points (there are calculators here) and watch the Trin, Tick, Put/Call ratio, etc. This way before you create an account you are familiar with how the price moves, how it acts at various important levels, etc.

 

And Interactive Brokers will let you trade futures. So will Trade Station, but I believe you have to be considered an active trader for at least 2 years.

[torero 10]

Be prepared to blow your account. If it's your last shot, demo trade at least 6 month on a single strategy until you're comfortable and trade it exactly planned on paper in snow, sleet, rain, sun, hailstorm, plague, flood, blah blah blah. If they roof falls on you, expect to pull that same trigger as planned if one of your fingers are still working and the computer is still connected to an order server. I'm exaggerating but just want to point out how discipline plays an important part in not blowing out the account.

[Soultrader 12]

Maybe look into Infinity if you are interested in the eminis. Also since you are a beginner you can have Infinity place an automatic stop daily limit on your account. In other words, it will liquidate and freeze your account once a predefined stop is hit. This could be $300, $500, $1000, etc... any amount you tell them. With the current capital you plan to trade with, I would say it will be hard to practice sound money management. You are severely handicapped to begin with. I suggest you paper trade your way to consistency with sound money management rules, solid strategies, and market understanding before risking a single penny. You will be surprised to see how quickly the futures markets can diminish your account.

[brownsfan019 17]

bk - here's my suggestion - do not use the words 'invest' and 'emini futures' in the same sentence or breath. When you trade futures, you are trading VERY AGGRESSIVE and HIGHLY LEVERAGED products. These are NOT your buy and hold mutual funds like you may be used to.

 

First step is to educate yourself. Be careful, there are many co's out there that will prey on newbies like yourself. Do your homework first.

 

Here's some FREE info out there:

http://www.cme.com/edu/

http://www.cbot.com/cbot/pub/page/0,3181,1130,00.html

 

You could spend the next few weekends reading and reading. And you need to.

 

Lastly, I am not a fan of daytrading futures in a retirement account. Not only is it a pain in the butt to get the account opened to trade futures, it costs more and I don't condone daytrading your retirement funds (no matter the size).

 

Good luck!

[Dogpile 10]

just realize you are sitting down with a bunch of sharks trying to take your money. it takes most people 9 months or more before they can even breakeven.

 

seriously, this is very complex stuff. I would suggest you read:

 

Street Smarts (Raschke & Connors)

Markets In Profile (Dalton)

Mastering The Trade (Carter)

 

My other advice:

1) don't overtrade your account. Find 1 or 2 very specific set-ups that only occur maybe a handful of times per WEEK and become a master of these trades and don't force 'em. Over time, you get several of these going and you get a few choice trades per day. You will STILL be wrong a fair amount of the time.

 

2) play for small targets most of the time. Rashke talks about how it is like fishing -- you cannot bag the big one every single day. you stick your line out there and see what you can get -- most of the time, they are small ones. occassionally, you catch a big one. just don't be the guy letting all the little ones go.

[james_gsx 16]

Basically you will only have a few chances every month to make big money. The rest of the time you and everyone else are trying to keep their account alive. They know you are new and that you are emotional, and they will take advantage of you.

 

I'd also focus on the YM first and just watch it, take tons of notes.

[notouch 10]

bk - here's my suggestion - do not use the words 'invest' and 'emini futures' in the same sentence or breath. When you trade futures, you are trading VERY AGGRESSIVE and HIGHLY LEVERAGED products. These are NOT your buy and hold mutual funds like you may be used to.

 

 

Good point. If you're looking to invest you're far better off with an ETF like SPYDERS (same underlying as ES - S&P500), DIAMONDS (same underlying as YM - Dow) or QQQQ (same underlying as NQ - NASDAQ).

 

The longest time frame for futures trading is the expiry of the contract which is only 3 months from start to finish. Anything more than that and ETFs are your thing.

[Dogpile 10]

<<The longest time frame for futures trading is the expiry of the contract which is only 3 months from start to finish. Anything more than that and ETFs are your thing.>>

 

I don't see much advantage to ETF's unless you truly are a long-term holder. Futures have a tax advantage over ETF's. 60/40 cap gains treatment on futures vs full tax rate if hold ETF less than 12 months.

 

also, you do have the option of easily trading futures in the overnight session -- for better or worse.

 

true though, you do have to deal with the rollover with futures.

[notouch 10]

The tax issue you mention is specific to the US. I don't know how relevant it is to the OP (not at all relevant to me).

 

There are other funding issues to consider. ETFs pay a dividend whereas if you were planning long term investments with futures you'd need a lot of money in your brokerage account (probably not receiving any interest) to cover the large drawdowns that you'd probably suffer.

[brownsfan019 17]

Here's my view - my risk capital is in daytrading of futures. My retirement and serious money is in ETF's. Trying to use futures for a long-term play is rather difficult in my opinion with rollovers and the amount of leverage at play here. You can't simply just sit on a losing futures position and know that sooner or later the market has gone up, so just hang on. Different mentalities in my opinion.

 

Not to mention, has anyone had success here opening an IRA at a custodian to daytrade futures that was quick and easy? I only attempted this once (with Millenium as the trustee) and I could not get simple emails returned. I thought since they could not return my simple email questions that trying to get actual funds there and get responses could be a pain and not worth the effort.

[Guest cooter]

Not to mention, has anyone had success here opening an IRA at a custodian to daytrade futures that was quick and easy? I only attempted this once (with Millenium as the trustee) and I could not get simple emails returned. I thought since they could not return my simple email questions that trying to get actual funds there and get responses could be a pain and not worth the effort.

 

No one said it would be easy, Brownie!

 

But it is doable, for someone who really wants to get it done.

[brownsfan019 17]

No one said it would be easy, Brownie!

 

But it is doable, for someone who really wants to get it done.

 

It wasn't worth the effort for me I guess.

 

Trade my risk capital and invest my retirement money. Seems like a good combination to me. I could not imagine daytrading my retirement dollars. It doesn't get much more risky than that... If that's all you got, I guess you could trade a small piece of it, but I still would be leary of that. I've traded and been in the markets for quite awhile now and would not suggest using futures for retirement dollars, ESPECIALLY IN THE BEGINNING. Odds are that you will lose a good chunk of that money and when it's your retirement at work, those losses are a tad harder to swallow.

[Guest cooter]

So the consensus would be - especially for newbies - don't trade your savings and retirement accounts away - be it 401K or IRA. You'd rather have that money years later available to you, instead of losing it now.