Looking To Begin Trading Futures: $$ Losses

[Andrew28 10]

Hi folks. This is my first post in this forum. I am new to the futures market but not quite new to trading. I started messing with the stock market back in the late 90's when anyone could of made money buying blindly. I am now retired and would like to consider trading actively full-time. I started reading several books on technical analysis, commodities, and futures as I would like to learn to trade properly.

 

I have about $20,000 of risk money that I consider as tuition as I understand this can be quite a difficult profession. My main goal is to be able to make a living trading. I am here to seek a little advice on my current road block I am encountering. This is my third month trading the futures market and I have lost roughly 40% of my initial stake. I practice strict money management and place approximately 3 trades a day. I am still at a point where I have not yet settled down on one method; still testing out various techniques.

 

Any advice to get me going in the right direction would be appreciated. Thank you.

[Soultrader 12]

I think you are on the right track towards learning this game. If you are willing to put up $20,000 as tuition money you will have plenty of room to learn. Just make sure you trade small until you are able to establish consistency.

 

To comment on trading methodologies, you are at a phase of experimenting with various methods. I suggest you continue to do so but eventually start developing your own. Your methodology should be branded by you. This allows you to have your own trading style.

 

Learn the pyschological side of trading. Losing 40% of your stake is painful... but make sure to keep a trading journal and learn from all the mistakes you have made and will continue to make.

[budman 10]

Andrew,

 

if I were you, I would only be trading one contract at a time. When you've been profitable for few months, move up to two etc. Paper trading is not the same. You need money on the line to experience your real emotions.

If I could start over, this is what I would have done.

 

I started with 2 contracts. After a few winning trades I jumped to 4 etc. Within weeks I was trading 20 contracts...big mistake. I lost so much money because I thought I knew what I was doing. Looking back, I would have been much better off if I stayed with one contract for a few months while learning this business. After all, it is a business.

[carter 10]

As much as you can learn from your own mistakes, you can also learn from another persons mistake. Budman has some really good advices for any novice trader.

 

I also recommend starting off with 1 or 2 contrracts. Trading is a business and a skill game. During the bubble, no skill was necessary to make money. But with current market conditions, this is the true trading arena. Master the skill or you will lose.

 

Good luck on your journey Andrew. Most traders have been where you are. Those who climb out of it are the traders that will make it in this business.

[Andrew28 10]

So basically I should start small and work my way up. I would like to know some strategies that work in the futures market. Can a trader apply the same strategies in trading stocks or forex to the futures market?

[Guest FLX]

You need to list your mistake each time you trade to confirm cont. pattern that is developing. Like your writing Trading bible for yourself. Your will find your self doing the same mistake over and over. This is the only way your can start to trade properly.

My major mistake is not draw trend line and s/r line on all my charts. That is the biggest one right there!

A trade just broke through the S/R line right now im in the ER trade right now with a tight stop! Got to go it running hard!

[Kiwi 16]

1. Stop trading with money NOW

2. Paper trade until you find a method you are winning consistently with.

 

Although we all did it, its stupid to waste your capital while you are searching for a method still. STUPID

 

Learn patience. One element is being patient enough to trade on paper until you have no less than three winning weeks (really winning not just scraping in with a bit of luck). Another element is being patient enough not to use money until you find a method that works with you. Another element is being patient while waiting for a trade.

 

STOP now. Be patient. Find a method. Paper Trade until its second nature. Then work thru any psychological issues after you move to cash.

 

Your stake is way too small to waste it until you have a consistent method and a solid trading plan. Money management just creates a slow drip of blood as you cut yourself with a small knife.

[Guest FLX]

The last few posts is the best information we could give at this time, kiwi approach is very similar to my own. It might take you two year but look what you can lose in that period of time. What is your hurry enjoy your retirement, and the trading will soon follow. You need to practice before you can walk out on that stage. Flx I made 500 per contract, in the ER2 today but it took me 2 1/4 years to get where im at today.

[Bfbusa 10]

Hello Andrew28,

 

Along with the other posts I also suggest this.

 

Review ALL the videos in the video section. Pay particular attention to Tape reading, pivot points and Value area high and lows. SoulTrader does a fine job in getting the idea of the methodology and tools needed to trade the futures successfully. Also look in the chart section.

Then pick a futures contract that best suites your personality. For me it's the YM's. Others are the NQ's, ES or the ER2. But I would recommend the YM's. The Dow mini. Each contract is only $5 per tic. So you won't lose as much during your learning curve. Just start with one or two contracts.

 

Keep to your stops and as soon as you partially exit ( if doing 2 or more lots) a trade at your first target always bring your remaining contract to break even. You just guaranteed yourself a profit w/o the emotional baggage.

 

After you have viewed the videos here got to TradeTheMarkets.com and sign up for their free e-mail videos.

 

Hope this helps.

[werdgr 10]

Hi,

I am new just like Andrew28.

I also have $20,000 to start to learn and hopefully master it to a point that i can walk by myself.

Any direction is appreciated.

Since i work during the day and only available to trade few hours at night and Saturday.

I am living in NorthEast US.

Thanks,

[Bfbusa 10]

Hello Werdgr,

 

Hmm....thats a tough one. I don't recommend trading futures or stocks in the after hours. Extremely risky. The best advice I can offer is what I would do if I were in your shoes.

 

First. Learn to swing trade stocks. Thats taking a position for a few days to a week or two. or FOREX. The Foreign exchange.

 

If you get a day off from work, then you could e-mini futures or stocks.

 

One more thing. You say $20,000? OK, take just half of that and put in a brokerage account. Keep the rest in a safe place, money market etc.

This way it will force you to trade small at first until you discover your edge and learn proper risk management. Always remember, if you learn to control your loses, your profits will tend to them selves. Always use stops and stick to your trading plan.

 

Hope this helps, good luck.

[Kiwi 16]

You could probably trade the new mini-nk in osaka in the after hours timeframe. Its small, liquid, honest, and has nice trends on (say) 5min bars. Also market profile etc apparently work well with the Nk. IB will let you trade it or the SGXNK but you need to check whether its open for USA nians yet.

[ezduzzit 10]

As I began reading the responses to poor Andrew's inquiry I was flabberghasted that no one was telling this well intentioned but severely misguided fellow to stop trading with real money until he found a method where he was routinely and consistently profitable! There is no acceptable reason to let someone go on like that without calling it to their attention as the first and most immediate order of business.

 

I take my hat off to Kiwi who was the first and only one to really tell it like it is and bring poor Andrew back to reality before he had to take a job at WalMart for a year or two just to replenish his initial trading capital.

 

Please, let your initial risk capital come in the form of your time, study and effort, not your hard earned money. Once you have found the method that works for you consistently, that is the time to start risking 1 or two contracts per trade (again just on high probability trades) until your confidence, success and working capital all grow to the degree that you feel comfortable moving up to greater size, which I suggest you do very slowly anyway.

 

It takes awhile, even at the smallest of size, to adjust to living with your trading emotions when you make the switch to trading real money. You will undoubtedly find that as you increase in size you may have to re-learn how to live with those emotions again and again until such time as you finally reach a size and/or risk level you do not feel comfortable going beyond.

 

Additionally, Kiwi mentioned patience as a key trait of a good trader. I am here to tell you that successful trading can often feel as boring as watching paint dry, so you better get comfortable with that. Otherwise you are likely to be jumping in willy nilly at the wrong times just to be actively trading and I can think of no more sure way to a rapid blow-out your account.

 

Andrew or any other inquisitive beginner should read Kiwi's advice over and over again until it sticks like glue and becomes your way to attack trading the markets.

 

Happy Trading To All

[PipsTrader 10]

From my own personal experience I would recommend starting off with funds that are expendable. At least for me when the funds are less, I feel less pressure when positions are going against me and I am able to make more sound decisions.

[Bfbusa 10]

MY Recommendation is this. Download the InfinityAT demo platform. You trade live market with real P\L but with no money. It's as close you will get the real thing and paper trader at the same time.

Infinity Brokerage Services

[dalby 10]

I think the mini nikkei is a great idea. I've played around with it before, and at 1/5 the size of the SGX contract, it's MUCH more manageable for beginners.

 

If you have over 25k in the account, then you can daytrade the DIA as a proxy for the YM.

 

It's an ETF and every 100 shares = $1 per dow point, so you can trade much smaller size than the dow minis, and still get the same market exposure

 

the problem is that you will violate pattern daytrader regs if you daytrade it with less than 25k

 

DIA also has inferior fills compared to YM (at least in my experience), so if you can make your strategy(s) work on DIA, you will be well equipped for YM.

[Soultrader 12]

I think the mini nikkei is a great idea. I've played around with it before, and at 1/5 the size of the SGX contract, it's MUCH more manageable for beginners.

 

If you have over 25k in the account, then you can daytrade the DIA as a proxy for the YM.

 

It's an ETF and every 100 shares = $1 per dow point, so you can trade much smaller size than the dow minis, and still get the same market exposure

 

the problem is that you will violate pattern daytrader regs if you daytrade it with less than 25k

 

DIA also has inferior fills compared to YM (at least in my experience), so if you can make your strategy(s) work on DIA, you will be well equipped for YM.

 

 

Would you happen to know any brokers besides IB that provides mini Nikkei? Thanks

[dalby 10]

nope. I am an IB user (also AMTD) and am in the process of signing up for TS.

 

I didn't realize other brokerages didn't have it

[SpearPointTrader 10]

I would not even think about trading for real, if I could not consistently grow a paper trading account. It's hard enough dealing with the psychological pressures of live trading, but to do so when you don't even have a functional system as well? That's nuts.

 

Most trading software has a simulator that is virtually the same as real trading. Master that first. THEN use real money. The psychological crap is so much easier to deal with if you have a proven system to begin with.

[pipbanker 10]

If I may suggest something here that would be this. DON'T DO any live trading before you can profit on demo. Consider live trading only if you are profitable for a few month.

When you move to live and gain only loses, see what was that? There could be psycho involved.

Believe me, you will have plenty of opportunities to drain your account. Dont you it while you are learning.

That is the first step. When you get over this stage then you might move to step 2.

This might take you a while ( few month or few years)

But hey, demo is cheaper

[Sandov 10]

I would not even think about trading for real, if I could not consistently grow a paper trading account. It's hard enough dealing with the psychological pressures of live trading, but to do so when you don't even have a functional system as well? That's nuts.

 

Most trading software has a simulator that is virtually the same as real trading. Master that first. THEN use real money. The psychological crap is so much easier to deal with if you have a proven system to begin with.

 

I wouldnt say the "psycho crap"-. that crap can turn a profitable demo-trader to a consecutive-loser one. happened to me.

[Stiffroot 10]

I noticed people in here naming trading platforms for Futures like IB and more. As a beginner I have looked around at Think or Swim, IB and came across Kingsview. Anyone have any ideas on which platform is best for the beginner with around $10 to start on? You all seem to be much more knowledgeable than myself. Hoping to catch up....