First Weeks of PAIN

Hello All,

I've started trading Eurostoxx50 futures intraday for the past three weeks.
After a good start with 1 or 2 lots trading, I became overconfident and started trading 4 to 8 lots,too fast an increase in size considering my experience.I am now down 2k in my account over the three week period.

My question is, what is the "cost of learning for a newbie?"I understand that this can change depending on the trader but does anyone have an idea of the average? 5/10/20k? and over what period?

Also, I have set myself a profit target of 5/10 ticks a day?does this seem too high/low on the eurostoxx50?

thanks for the help.

ZorroBoban10 said:

Hello All,

I've started trading Eurostoxx50 futures intraday for the past three weeks.
After a good start with 1 or 2 lots trading, I became overconfident and started trading 4 to 8 lots,too fast an increase in size considering my experience.I am now down 2k in my account over the three week period.

My question is, what is the "cost of learning for a newbie?"I understand that this can change depending on the trader but does anyone have an idea of the average? 5/10/20k? and over what period?

Also, I have set myself a profit target of 5/10 ticks a day?does this seem too high/low on the eurostoxx50?

thanks for the help.

Click to expand...

The cost of learning in monetary terms will vary from trader to trader as you know. I haven't traded the EuroStoxx myself but I know quite a few EuroStoxx traders and they all struggle. I sat with quite a few - scalpers and swingers and none of them were consistently profitable. They had gone though several k (maybe as much as 10k) and had been grinding away for a year or more. So that's an idea of the cost in money and time. In terms of other costs...this might be of interest: http://www.trade2win.com/boards/general-trading-chat/40096-fate-trader.html

And, I would say 5-10 ticks a day sounds low. It's very, very low if you are counting ticks per contract. E.g. a 1 tick move on a 4 lot would be 4 ticks - which is how the pro traders do it.

If you're not counting like that...well it still sounds low. 5 ticks a day on an 8 lot is, after all, only £320. And particularly when you consider that market can blip 5 ticks and easily erase your whole days P&L in a heartbeat.

If you want my advice, go back to 1's and 2's for now. It's a marathon not a race. Overconfidence will destroy you. Always has. Always will.

Also remember that the reason many traders fail is because they are underfunded and desperate to be free. Which leads them to take risks that they ordinarily wouldn't.

Be patient. You should be consistently making money on 1's and 2's for several weeks before you up your size and then do it gradually. After some weeks when your account has a good buffer, hit a 3. Regardless of outcome go back to 2. Wait a day or two then hit a 3 again so you are trying it on for size (to make a bad pun) Go on like that. Now you're doing 2's most of the time and sometimes 3's. If you have a good day then hit a 4. Then go back to 3's, sometimes 2's and rarely 1's. Don't just pile in with 8's. Go slowly.

Hello,
I think your profit target of 5/10 ticks a day is a good effort. What matters is rather to make sure you can do that with 1 lot for a much longer period of time. Perhaps on some days you will be able to take more out of the market, and sometimes a bit less, but as long as you can show a profit a the end of the week it will help your confidence and you will gain experience and feel for the Stoxx along the way. Then you can trade 2 lots, then 3 lots, etc. I assume you moved on to larger sizes because of the desire to make some more money quickly, which you will once you have managed to consistently be profitable week in week out.
If you need that money for living purposes, then there is no definite price tag on learning. You can end up down 50k in no time and until you have some sort of understanding of the market it will continue that way because you will have psychological hurdles to overcome. However, if you only play with risk capital, which you should be doing as a newbie, then the focus on being in the green every week should be prominent. Size will come in time, when the number of lots does actually no longer influence your decision-making process.
You can buy 50 lots on a "sure" trade only when you have traded that market so much that you know it is a "sure" trade. In the meantime, go back to 1 lot and work on your system. If you start screwing up with 2 lots, then take another step down to 1 and figure out what's wrong etc. Jimi Hendrix did not go on tour on the second week after learning to play the guitar. Nor does one perform heart surgery 2 weeks after getting into med school. Be patient and you will make it!

ZorroBoban10 said:

Hello All,

I've started trading Eurostoxx50 futures intraday for the past three weeks.
After a good start with 1 or 2 lots trading, I became overconfident and started trading 4 to 8 lots,too fast an increase in size considering my experience.I am now down 2k in my account over the three week period.

My question is, what is the "cost of learning for a newbie?"I understand that this can change depending on the trader but does anyone have an idea of the average? 5/10/20k? and over what period?

Also, I have set myself a profit target of 5/10 ticks a day?does this seem too high/low on the eurostoxx50?

thanks for the help.

Click to expand...

Hi there, If you keep burning through money at the rate of £2k every three weeks, the " cost of learning " is going to be quite high i think -

If your starting out try not to focus on lot size this/that - try and think more about RISK/REWARD ratios instead - :idea:
(STOP that "CRAZY " size - and trade in wider time frames) - and work on your ENTRY.. !! :idea:

Trying to make " TOO MUCH " money - " TOO QUICKLY " - " ALWAYS " results in " LARGE " losses in the futures markets... !! :!:

(as history and most traders with some experience will testify) ... !!

ZorroBoban10 said:

My question is, what is the "cost of learning for a newbie?"I understand that this can change depending on the trader but does anyone have an idea of the average? 5/10/20k? and over what period?

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This isn't the right question at all. You should be asking yourself how much time and effort you are prepared to put in and how much money are you prepared to lose before you accept that you are not fitted for this profession. I don't understand why people are convinced that they have a right to success in trading.

new_trader said:

This isn't the right question at all. You should be asking yourself how much time and effort you are prepared to put in and how much money are you prepared to lose before you accept that you are not fitted for this profession. I don't understand why people are convinced that they have a right to success in trading.

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There you have it ZorroBoban10. What if it takes 6 months? What if it takes you 6 years? How about 12 years? Or 25 years? What if you never become consistently profitable?

What are you going to do?

Are you prepared to stick to it if it takes 6 months? Or 6 years? Or 12 years? Or 25 years?

Or rather, when are you going to give up?

Hi Trader_Dante,

Thanks for your detailled reply, most helpful. The game plan you've outlined sounds good, will follow it for a few weeks/months and see where I am then.

Asking around 10 ticks target per day (counting a tick as a tick,regarless of lot size) as a beginner seems to be a common target? Just surprised that you think this is low (for a newbie), although I agree that its difficult as one blip can wipe everything out in a flash (been there a few times..).

Perhaps a more accurate question would be: as a day trader (assuming this is your style) what risk/reward average do you aim for per trade (e.g ready to lose max 4ticks to make 2?)

cheers

ZorroBoban10 said:

Perhaps a more accurate question would be: as a day trader (assuming this is your style) what risk/reward average do you aim for per trade (e.g ready to lose max 4ticks to make 2?)

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The answer to this really depends on your win/loss ratio and you will only find the answer to that by placing a statistically valid number of trades and analysing it. e.g. If you take 100 trades and win 60 and lose 40 you have a win/loss ratio of 60%.

The example you give - preparing to lose 4 ticks to make 2 is very poor and you are likely to lose over the long run unless your win/loss ratio is incredibly high which is hard to maintain consistently.

As an example when my win/loss ratio was around 90% I was happy to shoot for a 1:1. Risk 50 ticks to make 50 ticks.

If it drops to say 40% as mine did for a while, you have to up your game and I had then had to go for a 2:1 absolute minimum. E.g. Risk 50 to make 100.

I would say that if you can get a 3:1 on average (risk 5 to make 15) then you are home free. You would have to have a terrible strike rate not to make money.

the cost of learning for a newbie, is as much or as little as you want it to be, with brokers allowing micro and mini lots there is no reason for it to cost you anymore than you can afford to lose

if i was you, I would stop trading full contracts and find a broker where you can trade on a much smaller scale.

otherwise the cost of your tuition will be high, I just hope you can afford to lose it, because that is what is most likely to happen.

new_trader said:

This isn't the right question at all. You should be asking yourself how much time and effort you are prepared to put in and how much money are you prepared to lose before you accept that you are not fitted for this profession. I don't understand why people are convinced that they have a right to success in trading.

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I really like this post a lot. Newbies won't, but I really, really do.

ZorroBoban10 said:

my question is, what is the "cost of learning for a newbie?"I understand that this can change depending on the trader but does anyone have an idea of the average? 5/10/20k? and over what period?

Click to expand...

Not sure how much help this is but I initally lost 300 quid spread betting before I got it right. I lost this over a six-8 week period trading 10p bets up to 50p bets. I then lost another 100 quid before I 'invested' (money and time) heavily in books, news letters, forums and screen time - 6/7 hours a day for 2 months. Then I gradually moved from break even to doing well. By this time I would have invested more if nec. as I was uttlery convinced, through rigorous/repetitive back testing and still playing with demo accounts, that I had what it takes.

So the 'money pain' was possibly 500 quid, however, I made a commitment to do this full time and as a consequence didn't earn a regular wage for 4/5 months, now bear in mind I have 2 teenagers and a littlun and a v. supportive wife to support...Is it/was it worth it? Oh yes...

But a word of warning; well a sentence or two, if you don't commit to do this full time you won't truly succeed, you may make enough to pay for the family holiday each year, pay for a conservatory/new car/kids further education... and good on ya if that's the difference it makes and heh that cannot be scoffed at. But if you want to succeed you have to totally commit to this business/industry to a level that scares most off at the first or second hurdle.

Black Swan said:

But if you want to succeed you have to totally commit to this business/industry to a level that scares most off at the first or second hurdle.

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And even then, the odds are still high that you could give up everything important in your life, fail at trading and feel like you have nothing left to live for.

Take acting as an example. How many people think to succeed you have to totally immerse yourself in it? Go to acting school, mix with the right people, work unpaid on student films etc. I know a lot of people that want it more than anything, are in their late thirties, working in a bar for £5 an hour so they have free time to go to auditions (and because there is no other career they want to do), still waiting for their big break.

Sad but it happens.

There is every possibility that however hard you work and however much money you put in and however much you deserve it, that you may never make it until the day you die.

Sorry to be negative. But it is true nonetheless.

trader_dante said:

And even then, the odds are still high that you could give up everything important in your life, fail at trading and feel like you have nothing left to live for.

Take acting as an example. How many people think to succeed you have to totally immerse yourself in it? Go to acting school, mix with the right people, work unpaid on student films etc. I know a lot of people that want it more than anything, are in their late thirties, working in a bar for £5 an hour so they have free time to go to auditions (and because there is no other career they want to do), still waiting for their big break.

Sad but it happens.

There is every possibility that however hard you work and however much money you put in and however much you deserve it, that you may never make it until the day you die.

Sorry to be negative. But it is true nonetheless.

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Totally agree, sorry to go off on a tangent (off to the gym in five minutes/once short cable trade runs out of steam so i've got time for a rant) but you've made me recall when the sickening Obamas visited London;

She spends time crying in the assembly hall of a school in a sink estate telling a mixed race audience of girls that they can be anything they want to be if they just "dream"...yeah right, it'd been fairer if she'd have said; "the majority of 'yawl' will leave school at 18, and 25% of you will be in households were no one works (yesterday's ONS report) and you'll carry that torch. 30% of you will be unmarried teenage mothers and 10% of you will have some substance abuse problem. Even if you do find a job then given the deep seated prejudices that exist in the US as well as the UK regarding your race, sex and the miserable environment you' ve lived in it will adversely colour your decisions for the rest of your life....go on dream, I fooking dare ya..."

Had some 'Ollie Plimsolls' guy at my eldest Daughter's school give a pep talk to parents recently re. telling kids they are capable of anything during exams, gave a tale regarding his cruel Dad who killed his dreams;

He told his Dad he wanted to be an astronaut and his Dad told him to get an apprenticeship in engineering; "why not set your sights a bit lower Son, design the engines that make the rocket fly, only one in a million can be the astronaut...?"

The sad tw@t is now flogging his ar5e with his silly positive mental attitude 'legs akimbo' league of gentlemen style road show around schools, Christ knows how anyone is taken in by that kind of 5hit, should have taken his dad's advice...

oops Cable..

Black Swan said:

Totally agree, sorry to go off on a tangent (off to the gym in five minutes/once short cable trade runs out of steam so i've got time for a rant) but you've made me recall when the sickening Obamas visited London;

She spends time crying in the assembly hall of a school in a sink estate telling a mixed race audience of girls that they can be anything they want to be if they just "dream"...yeah right, it'd been fairer if she'd have said; "the majority of 'yawl' will leave school at 18, and 25% of you will be in households were no one works (yesterday's ONS report) and you'll carry that torch. 30% of you will be unmarried teenage mothers and 10% of you will have some substance abuse problem. Even if you do find a job then given the deep seated prejudices that exist in the US as well as the UK regarding your race, sex and the miserable environment you' ve lived in it will adversely colour your decisions for the rest of your life....go on dream, I fooking dare ya..."

Had some 'Ollie Plimsolls' guy at my eldest Daughter's school give a pep talk to parents recently re. telling kids they are capable of anything during exams, gave a tale regarding his cruel Dad who killed his dreams;

He told his Dad he wanted to be an astronaut and his Dad told him to get an apprenticeship in engineering; "why not set your sights a bit lower Son, design the engines that make the rocket fly, only one in a million can be the astronaut...?"

The sad tw@t is now flogging his ar5e with his silly positive mental attitude 'legs akimbo' league of gentlemen style road show around schools, Christ knows how anyone is taken in by that kind of 5hit, should have taken his dad's advice...

oops Cable..

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Nice post and its very true.

Dreaming is all well and good but in this business the biggest chance you have is when you have your feet firmly on the ground.

If you look close enough and actually talk to people you will see that all around you are the remnants of broken dreams.

I spoke to a really nice man in Costa Coffee today. He was telling me how he used to a pro poker player when he was a young boy in Italy. He made a ton of money at the time as he played way better than his peers and while he was using that money to enjoy life he was dreaming of becoming bigger and bigger. Now, many years on, he is the manager of Costa. What happened, I don't know. Maybe he couldn't make it. Maybe he didn't want it. I didn't ask. And I'm not bringing him down, I'm just saying that dreams and reality are very hard to unite and it's all very well to listen and believe in the "you can achieve anything you want" spiel but often this can lead you to spending years and years of your precious life aiming for something you're never going to reach.

True, but surely its better to have tried and failed, than never bothered in the first place?

If everyone just gave up because they knew they were probably going to fail, then nothing would ever be achieved, shirley?

Dreaming is for good mood, big smile, inspiration and direction. The thing for more realistic shorter-term tactical targets is called Planning. But without dreaming your eyes quickly lose the sparkle. Dreaming gives you an enormous amount of energy. There's nothing like it.

Besides dreaming, don't forget to learn to step aside and look at yourself, look where you are going and try to gauge where you are going to end up at this pace. This gives perspective and ensures that the dreams are somewhat realistic. And don't wait for the Big Break. If you really, really want something, if you give it your all and then a little more, and ONLY if you love what you do, then, little by little, you will get there, and there will be clear signs along the way confirming that you are on the right track. If you don't see any signs of progress, maybe it's time for a change.

Couldn't agree more. Dreams and nothing else are what those sad deluded fools on XFactor and Britain's Got Talent have before their inflated ideas are burst by reality. A lot of hard work and a bit of luck make dreams come true, but no one seems to stress the former very much nowadays.

Paul Potts didn't come from nowhere, he spent 12000 quid on operatic schools to train his voice, did a lot of amateur opera, and then he got very, very lucky - but he put in the hours to reach that point.