Please help, Futures Trading

[Mps721]

Ok so for my graduation present my parents gave me 5,000$ to start day trading. I heard that futures were the best for day trading so I started there. Right now I am down to about a little over 3K and I feel that I am loosing money because I do not have a good strategy or I am not trading properly. I NEED SOME ADVICE PLEASE HELP BEFORE I LOSE ALL MY MONEY

 

[Mps721]

Also, I realize im not going to get rich over night, I would be happy making 50 bucks a day on average

 

[BataviaTrader]

okay. lesson 1. do not day trade or do any trading from day 1 or as soon as you get bucks in your pocket.

lesson 2. Be prepared to spend 1000's hours of reading forums like these, studying daytrading books (google them up), observing charts for a year or two, develop patience in the meantime and write a Trading Plan (template also to be found somehere on this forum).

lesson 3 (after finishing lesson 1-2). Open up a simulation account and get your Trading Plan at work. Make sure you make stable profits for at least 6 monts.

lesson 4. grab your 5k (or what is left), fund a live-account and have fun with live daytrading.

Happy studying!

 

[timsk]

Hi Mps,
Welcome to T2W.

The best thing you can do right now - today - is to STOP trading your live account. If you carry on as you are, the likelihood is that you'll lose all your money. Either you don't have a robust methodology with a positive expectancy or, if you do, you're trading too much size. IMO, with a $5k account, you shouldn't be trading more than 1 contract - and preferably an instrument like YM as opposed to ES. That will permit you a maximum 10 tick stop, i.e. a maximum risk of 1% of your total equity per trade (for the YM, that is). So, I suggest you switch to sim, trading 1 contract only, and see how you fair. If you don't have a clearly formulated trading plan in place, check out the 2nd and 3rd links in my signature.
Enjoy!
Tim.

 

[pboyles]

Ok so for my graduation present my parents gave me 5,000$ to start day trading. I heard that futures were the best for day trading so I started there. Right now I am down to about a little over 3K and I feel that I am loosing money because I do not have a good strategy or I am not trading properly. I NEED SOME ADVICE PLEASE HELP BEFORE I LOSE ALL MY MONEY

Stop now and close your live account or you will lose it all. Dont start again until you know what youre doing, which may take several years.

 

[Mps721]

I have been trading since the summer and use a stochastic (14,3) and I try to identify a chart pattern. What made me lose that money in the beginning was not knowing when to cut my losses, which now I have a better understanding of.

 

[Mps721]

Hi Mps,
Welcome to T2W.

The best thing you can do right now - today - is to STOP trading your live account. If you carry on as you are, the likelihood is that you'll lose all your money. Either you don't have a robust methodology with a positive expectancy or, if you do, you're trading too much size. IMO, with a $5k account, you shouldn't be trading more than 1 contract - and preferably an instrument like YM as opposed to ES. That will permit you a maximum 10 tick stop, i.e. a maximum risk of 1% of your total equity per trade (for the YM, that is). So, I suggest you switch to sim, trading 1 contract only, and see how you fair. If you don't have a clearly formulated trading plan in place, check out the 2nd and 3rd links in my signature.
Enjoy!
Tim.

Wow, Tim thanks for all the help. Before I read the template I had sort of an understanding of everything outlined in there but now it just really hit home. I cant thank you enough for the help!!!

 

[sunkith]

Before we can say anything useful, could you provide me with the key statistics of your trade ?

1. The average daily return
2. The win/loss ratio.
3. The average number of trades each day.
4. The average holding period of one position
5. The average fraction of your equity which is used for the margin of each trade.

 

[Mps721]

Before we can say anything useful, could you provide me with the key statistics of your trade ?

1. The average daily return
2. The win/loss ratio.
3. The average number of trades each day.
4. The average holding period of one position
5. The average fraction of your equity which is used for the margin of each trade.

Since its futures I dont use margin just 1 contract, and I have'nt really had any winning trades, just a few

 

[jpadventure]

Trading is a learned skill, you'll have epiphany after epiphany after epiphany. It takes at least 1 year for the most dedicated to come good. If you continue live, you'll surely build experience but you'll lose everything and give yourself undue stress.

Everyone here thought they knew it all when they didn't. Happened to me at least ten times, this last one seems to of lasted longer than the others.

No quick way, study and trade demo.

 

[Renatogrant]

Wish someone gave me $5k to trade! I'd be on a beach immediately reading books about trading for about £100!

As all the experienced traders on here have said, you can't just simply trade a live account so soon without a very good understanding about trading, otherwise your just gambling.

It takes different people differing amounts of time first to get a good grasp of the basics and then to develop a methodology which is your own. Daytrading the ES is no joke and in today's volatile markets you can get wiped out immediately. Even trading 1 contract with a 4-5 point stop will get you killed if you have little idea of whats going on, the supply, the demand, the tests, the retacements, the congestion, the waiting game.

I traded on sim ( Ninjatrader) for 2 years. Prior to that I just read and studied the charts and developed a methodology based on supply/demand. Am i good trader today, good would be an over statement! Better than I was would be more accurate. Do I make money, some days yes, others no but At the end of the week I must be up and that must take into account commissions.

Trading the e-mini is a serious business, takes a lot of chart watching and studying and understanding. Sometimes you have to sit on the sidelines or the volatility will wipe small guys like us out in a heartbeat.

My advice, buy some great books and read a lot. Find a platform with a good sim and practise while you learn. Don't try to get your $3k back to $5k yet or you will end up with $0k.

Head up & best of luck. Don't see this as a problem, view it as a challenge, we all hate problems but love challenges. Its a challenge to study charts all the time and study books. Don't look for a mentor either, seek advice but be careful whom you learn from.

Rgds
Renato

 

[mtt]

I agree with everyone. Stop trading. Educate yourself first! It will take a long time (years) for you to learn things and develop your strategy. You will make mistakes along the way. In the mean time, get a solid job, work hard, save up money until you have a good cash cushion. Learn trading on the side until your strategy works. It takes a lot of hard work.

 

[TGS1]

They say that it roughly takes 10,000 hours at a skill to become an expert in it. If you were doing it as any other 9-5 job year round, that's about five years.

The markets are not forgiving as you have already learned. It's very easy to look at the past history of what has happened with price and indicators and fool yourself into thinking you can successfully predict the next move. You need to spend a lot of time learning and practicing before you go live. Making mistakes is part of the human learning process and you don't want to pay for them when it's not necessary.

When I first started down this path 5 years ago, I was much the same. Eager to jump in and start trading for money. After just a couple of months of practice I thought I was ready to go live. I paid about the same price you did before I realized there was still a lot more I had to learn. $2K in the long run isn't that big a deal if you're intelligent and hard working.

Read books on trading
Study the charts as much as possible
Read trading forums like these to see what other traders do
Figure out the style of trading that best suits you

 

[Stirf]

Let me just copy/paste what I wrote to another newbie during the last hour...

Friday evening and I'm behind the computer... Can it get any worse? Nevertheless it's for a good cause. Trying to keep the poor sheep away from the wolves (vendors). I can only tell you about futures since I trade forex myself, but I think trading stocks, options or whatever product wont be much different.

You can have a degree in gardening, jigsawing, physics or economics it doesn't matter. What does matter is:"do you have the mental strength that it takes to be a day trader"? If you think you do, try to find info on volume in combination with price movement. What moves the market? Volume does! Not a MACD, stochastics or any of the other crap! Read more about it in the attachment.

Concerning "teachers" in this business. Would you work at a company (client support, administration) that teaches others how to make money day trading? No, you would buy their course and start making thousands of dollars from the comfort of your own home. Then why do people work there? Because the, sometimes thousands of dollars courses teach you nothing but crap. They know it and that's why they stick to the 9 till 5 job for the monthly insult.

You should consider yourself lucky that I read your post. Why? Because in general people that make money trading trade! People that don't kill time on a forum. I started realizing this when I was structuraly making money. Put yourself in my shoes... Would you be hanging out here if you were making money? And I don't mean enough money to buy you a soda. No you wouldn't.

I'm not here to discuss, that would be a waste of my time. I make money, PERIOD. You can take from the info what you like.

You got one hell of a bumpy road ahead of you, but the biggest bump; VENDORS AND TA you should be able to avoid with my advice.

I wish you lots of fun and you can thank me later!

Besides that I can recommend the 2005 Rioja "Marques de Riscal Reserva"! I'm gonna get me another refill of that!

 

[BataviaTrader]

Let me just copy/paste what I wrote to another newbie during the last hour...

Friday evening and I'm behind the computer... Can it get any worse? Nevertheless it's for a good cause. Trying to keep the poor sheep away from the wolves (vendors). I can only tell you about futures since I trade forex myself, but I think trading stocks, options or whatever product wont be much different.

You can have a degree in gardening, jigsawing, physics or economics it doesn't matter. What does matter is:"do you have the mental strength that it takes to be a day trader"? If you think you do, try to find info on volume in combination with price movement. What moves the market? Volume does! Not a MACD, stochastics or any of the other crap! Read more about it in the attachment.

Concerning "teachers" in this business. Would you work at a company (client support, administration) that teaches others how to make money day trading? No, you would buy their course and start making thousands of dollars from the comfort of your own home. Then why do people work there? Because the, sometimes thousands of dollars courses teach you nothing but crap. They know it and that's why they stick to the 9 till 5 job for the monthly insult.

You should consider yourself lucky that I read your post. Why? Because in general people that make money trading trade! People that don't kill time on a forum. I started realizing this when I was structuraly making money. Put yourself in my shoes... Would you be hanging out here if you were making money? And I don't mean enough money to buy you a soda. No you wouldn't.

I'm not here to discuss, that would be a waste of my time. I make money, PERIOD. You can take from the info what you like.

You got one hell of a bumpy road ahead of you, but the biggest bump; VENDORS AND TA you should be able to avoid with my advice.

I wish you lots of fun and you can thank me later!

Besides that I can recommend the 2005 Rioja "Marques de Riscal Reserva"! I'm gonna get me another refill of that!

Good posting. Many successful traders make money with volume and price. On the other hand, many successful traders make loads of money while using TA instruments.

There are a million ways to make money on the markets (and probably 10 million ways to lose it too).

But hey man, if volume and price are in your toolbox well good for you then. Toolboxes come in different shapes and sizes.

regards
BT

 

[andy2001]

preferably an instrument like YM as opposed to ES. That will permit you a maximum 10 tick stop, i.e. a maximum risk of 1% of your total equity per trade (for the YM.

1 tick on the ES is about 2.5 ticks on the YM. The ES has a tick value of 2.5x the YM. So a 4 tick stop on the ES is like a 10 tick stop on the YM with the same risk and about the same chance of being hit.

So I don't see what the big gain from using the YM.

 

[Mornington Crescent]

and ym ticks are a lot more volatile than ES

so ES is preferred especially for a beginner

 

[timsk]

1 tick on the ES is about 2.5 ticks on the YM. The ES has a tick value of 2.5x the YM. So a 4 tick stop on the ES is like a 10 tick stop on the YM with the same risk and about the same chance of being hit.

So I don't see what the big gain from using the YM.

Hi Andy,
Yes, you're spot on with the ES : YM relationship. In my experience, because the ES is more condensed, the 4 tick stop is much more likely to be hit than the 10 tick equivalent on the YM. The latter tends to move in a much cleaner fashion than does the ES. This matters most in a choppy range bound market. If I exit a YM trade with a small profit or at breakeven, the equivalent trade in the ES is likely to result in an exit at breakeven if I'm lucky or, more likely, at a loss. I'd sooner take a 5 or 6 tick loss on the YM than a a 4 tick loss on the ES. I'm able to do this as the YM is far more granular than it's big sibling. Therefore, contrary to Mornington Crescent's post (above), I'd argue that it's more suited to the novice trader. Novices are unlikely to trade the ES with very tight stops (i.e. 4 ticks or less), whereas, they can trade with stops less than 10 ticks on the YM. Having said the above, I accept that this says more about me and my trading style than it does about the relative merits of the two instruments. Just my $0.02 worth - each to their own!

Tim.

 

[ingot]

Trading is a learned skill, you'll have epiphany after epiphany after epiphany. It takes at least 1 year for the most dedicated to come good. If you continue live, you'll surely build experience but you'll lose everything and give yourself undue stress.

Everyone here thought they knew it all when they didn't. Happened to me at least ten times, this last one seems to of lasted longer than the others.

No quick way, study and trade demo.

I agree with this guy 100%

 

[fadenscales]

I have a few questions for you:

1. How long have you simulated for?
2. What money management do you use i.e. maximum losses for the day, maximum draw down, targets etc.
3. What strategy or plan do you work with?
4. Do you stick to a daily plan, or do you plan on the fly?
5. How much homework do you do in relation to your trading?
6. What do you want to get from trading?
7. Which markets do you trade and why?

There are more but they are good ones to start with. Once you have a clear answer to them you'll be better placed to plan your journey into the world of trading and it would also help us in tailoring suitable advice. Certainly I would agree that for now you should stop trading. I recommend looking into market profile and then volume profiling for trading futures. Understanding why price moves up or down may seem like a simple place to start, but many people fail at this from the outset. The market operates as a two-way auction, once you begin to understand this you can start to add other pieces to the puzzle. If you provide more specific problem areas I'm sure we will be able to give you guidance more catered to your specific needs.

Tom
Fade 'n' Scales