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suby

How to Get Started in Futures...?

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Hey Guys,

 

I'm planning to start futures trading in my account in the next few weeks. I don't plan to do so until I double my sim account a few times. I'll be trying to stick with e-mini Oil and Silver.

 

What would you guys recommend for a complete newbie for myself to get themselves as prepared as possible before I actually hit the ground running?

 

Many Thanks in Advance,

 

Suby

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1....ensure you have a plan for why, how and when you do things - this should be a working set of notes evolving.

 

2...make sure you are profitable using the SIM account - and consistent - doubling the account on crazy bets does not count. then be prepared to throw real money in the market and understand SIM trading is not like real trading.

 

3....have enough cash in the account to make it worth while.

 

4....keep a journal and review it

 

For 1 and 4 there is plenty of advice for good examples of these....but if you dont do both of these then it may be harder, and they are good habits to get into until things are ingrained mentally. They are also good habits to review when experienced.

 

5....When you start trading and loose money - dont search for the holy grail in some coach or mentor and spend the rest of your money chasing a solution that probably wont work either. Review what you did, learn from yourself first and then seek advice once you understand what you are doing wrong (or advice when stuck - you have to work it out yourself - otherwise buy my book it wont help but what the hell it makes for an interesting door stop). Ask as many questions as possible and review and think about those and how they relate to you.

 

6....if it all does not work - dont worry - its not the end of the world, its not suited to everyone. Get on with your life and do something else worthwhile.

 

Until then welcome, and enjoy.

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1....ensure you have a plan for why, how and when you do things - this should be a working set of notes evolving.

 

2...make sure you are profitable using the SIM account - and consistent - doubling the account on crazy bets does not count. then be prepared to throw real money in the market and understand SIM trading is not like real trading.

 

3....have enough cash in the account to make it worth while.

 

4....keep a journal and review it

 

For 1 and 4 there is plenty of advice for good examples of these....but if you dont do both of these then it may be harder, and they are good habits to get into until things are ingrained mentally. They are also good habits to review when experienced.

 

5....When you start trading and loose money - dont search for the holy grail in some coach or mentor and spend the rest of your money chasing a solution that probably wont work either. Review what you did, learn from yourself first and then seek advice once you understand what you are doing wrong (or advice when stuck - you have to work it out yourself - otherwise buy my book it wont help but what the hell it makes for an interesting door stop). Ask as many questions as possible and review and think about those and how they relate to you.

 

6....if it all does not work - dont worry - its not the end of the world, its not suited to everyone. Get on with your life and do something else worthwhile.

 

Until then welcome, and enjoy.

 

Siuya,

 

Thank you for the detailed response. The logging in a trade journal really hits home. Do you have any books/threads that you could recommend for a newbie to look at?

 

Do you base all of your futures trading solely off of technicals or do you integrate any form of fundamental analysis into your approach.

 

Are you solely a discretionary trader or do you use systems at all in your futures trading?

 

In your opinion what is the minimum amount someone should trade futures with?

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Siuya,

 

Thank you for the detailed response. The logging in a trade journal really hits home. Do you have any books/threads that you could recommend for a newbie to look at?

 

Do you base all of your futures trading solely off of technicals or do you integrate any form of fundamental analysis into your approach.

 

Are you solely a discretionary trader or do you use systems at all in your futures trading?

 

In your opinion what is the minimum amount someone should trade futures with?

 

Journal - Best bet is to search the net - get ideas and develop your own - It should be a living project and will change to suit you - ensuring the premise is that it should be used for review - to show what yo do well, and what you do poorly. Just recording trades is pointless. You also should record not just thoughts of the trades, but also feeling for why you took trades off early, or did not take certain trades - it can be revealing.

 

I am a technical trader - but I will used broad based macro themes or ideas to help frame any skew i might put into my thoughts. This usually affects any longer term trades I have......But I will basically be happy to be long or short if intraday trading depending on the market mood for the day. (There is nothing wrong with only going one way IMHO).

I am discretionary rules based - but have been trying to automate aspects of it. (dont read too much into how I do it - I have my own issues based on past history and personal characteristics not applicable to you)

IMHO - the minimum amount is an open question as a lot will depend on your circumstances, age, ability to refund, love of leverage, ability to scale up if profitable.....

I do think most new traders start off undercapitalised with stars in their eyes and possible returns.......but I would say that you can make a living trading only a few contracts, so you dont need a lot of money - unless you plan on being wrong a lot. The focus from your point of view should be to get everything right first, and then worry about how much money you will need - if that makes sense....dont quit the day job yet.

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One advice that I can give you is not to over leverage.

Consider carefully the number of contracts that you start trading as compared to the initial investment. Cash management will become part of risk management, and it will be an integral part of your trading.

 

Beginner traders today(sadly) want to max out the number of positions, while not understanding that trading is a management of risk.

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In my experience SIM is great for developing a methodology, mastering a set of rules, and learning how to follow them to the T. I think it's incredibly important to master this side of trading before going live because once you begin live trading it becomes a game of not managing trades, but managing emotions. You want to know your setups, your criteria for entry and exiting your trades before going live. It's also nice to have at least 50-100+ SIM trades worth of data to make some general conclusions about your method. The numbers have to make sense in order to take it live. That's my opinion anyways. Best of luck. I'd be interested in hearing how it goes.

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Thanks for all the replies guys!

 

I have started SIM trading with CL and QM - 4 Trades deep. Will post results once finished.

 

Does anyone use Ninja Trader?

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In my experience SIM is great for developing a methodology, mastering a set of rules, and learning how to follow them to the T. I think it's incredibly important to master this side of trading before going live because once you begin live trading it becomes a game of not managing trades, but managing emotions. You want to know your setups, your criteria for entry and exiting your trades before going live. It's also nice to have at least 50-100+ SIM trades worth of data to make some general conclusions about your method. The numbers have to make sense in order to take it live. That's my opinion anyways. Best of luck. I'd be interested in hearing how it goes.

 

Hey Tim,

 

I really appreciate the detail in your post. I currently use in my sim trading; Price, Pattern and Time. Specifically my methodology is based on the Pattern of the trend, the Volume and their relations to the moving averages... Am I missing anything?

 

I think right now at this point in time is i'm still overloaded and am having a hard time developing a concrete methodology... I was wondering if you could comment a bit more on this and lead me in the right direction in regards to this...

 

Many thanks!

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I also think the first thing you have to do is to develop a trading plan, it takes time and is hard work, but whoever told you this was going to be easy was trying to rip you off your money. You have to be able to deal with the huge ammount of leverage you get in the futures market and with what that makes with your emotions, it is brutal for the newbee.

 

Best of lucks, there are great resources here to build a trading strategy, I am currently following the Wyckoff forum, here en TL and I recomend it.

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I've said this before, but it bears repeating

 

To operate in THIS (contemporary) market, one needs to understand at least some of the mechanisms underlying the way that it moves....the "how" and "why"...specifically;

 

How;

 

Currenty, markets (all futures markets) are have a component that is automated...for that reason these markets tend to move from one level to the next, suddenly...then they settle into a range...

 

Why

 

Because the primary participants (institutions, banks, funds) have found that this type of movement allows them to maximize their profits, while minimizing risks.

 

So a couple of things to consider....

 

1.)Price action tells you much more than is currently talked about in TL threads..

2.)Price action adherents suggest that all you need is price....not true, opportunities to make money are time constrained....if you know how to anticipate time-constrained opportunties, THAT KNOWLEDGE allows you to position yourself in a way that minimizes risk while maximizing profits.

3.)Price action commentary while valuable, only goes so far....what is missing in my opinion is how to prepare....currently...skilled professionals use a method that provides a "heads up" as to early market direction. Why is this important? because most of the significant opportunities occur early in the first hour and late in the session when volatility is high...again having an understanding of this simple element of market structure can be the difference between making money and sitting on the sidelines watching "price move" without you....

 

Good luck

Edited by steve46

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One thing I will add is that CL/QM are very challenging contracts to trade even for many experienced futures traders. The stop losses required can be pretty large due to the often exceptional volatility. Few beginners can succeed with those contracts. If you find yourself struggling, consider other markets that have a smaller tick size and/or are less violent in movement. NQ comes to mind. In the currencies the British Pound is a possibility if you are trading early in the day, small tick size but a bit spiky in movement. The Canadian Dollar is a larger tick size, but less jerky in movement much of the time.

 

I believe you also mentioned silver in your earlier post. I would never recommend that market to a beginner.

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Hey Guys,

 

I'm planning to start futures trading in my account in the next few weeks. I don't plan to do so until I double my sim account a few times. I'll be trying to stick with e-mini Oil and Silver.

 

What would you guys recommend for a complete newbie for myself to get themselves as prepared as possible before I actually hit the ground running?

 

Whatever money you plan to fund your account with should be earmarked for "disposal." It should be money you do not need and can lose without suffering any hardship. That's the first thing.

 

Second, there are two ways to lose money: (1) the fast and it's gone-before-you-know-it way where you hold a losing position, or even double-down on a losing position. (2) the slow dribbling way where you take a series of small losses and over time these add up until you don't have any more funds to trade with.

 

Whatever trading method you choose must have a way of (a) taking losses, and (b) making up for those losses plus extra so that you end up net-profit. There's no point in always taking a bunch of losses unless you can make them all up plus some.

 

Your trading method must also guarantee (or at least try) that you never blow yourself up - that is lose so much money that you must inject additional funds in order to continue trading.

 

Next, realize that a few, or a dozen, or a hundred trades is no indication of how the 101-th trade will pan out for you. "Doubling your money" on your first dozen trades is absolutely no indication of what will happen in the next dozen trades. If you doubled your money on your first dozen trades, you can (and probably will) lose all or most of your gains on your next dozen trades. You must therefore have some way of dealing with this.

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Hi ,

 

I am posting thread for those who are new in options.

 

Kindly check my thread so that you can have basic understanding of F&O..

 

Thanks

 

Hey Guys,

 

I'm planning to start futures trading in my account in the next few weeks. I don't plan to do so until I double my sim account a few times. I'll be trying to stick with e-mini Oil and Silver.

 

What would you guys recommend for a complete newbie for myself to get themselves as prepared as possible before I actually hit the ground running?

 

Many Thanks in Advance,

 

Suby

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My advice is to read as much as you can about how real and successful traders trade, figure out what suits your own personality, develop a trading plan, and then get to work. I am not a big believer in simulated trading because you simply can't simulate real trading. Everything is different when real money is on the line. Start small, be sure to have another means of income to support yourself, and dive in. Good luck!

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I tell people don't go it alone. Unless you're prepared to make it your full-time job and you've got serious skills, hook up with a pro or two. A friend became a broker many years ago so I let her guide me to some traders she met. Being in Chicago, I've been able to meet traders in person and learn about their careers before I decide to take their recommendations. That's a huge advantage, I know! For a few years I got grain trade recommendations from a guy on the floor who managed hedging for corporate farming operations and food processors. He pulled off 200% in 2010!!

 

To filter out the noise I identify particular key traders I will follow consistently. I look for people who have had long careers as actual traders, not people who sell systems or training courses. I apply my own research to a professional's recommendations and I read the COT every week.

 

Futures trading started being a good percentage of my income about 10 years ago. When I lost my job a few years ago, I put a lot more time into it and now it's about 70% of my income.

 

Good luck!!!

---JMarsh

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