Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Where would you start as a beginner with $1500 to risk?
Actually, what you just posted to me is the third time I received the exact direction. Thanks for the confirmation... Looks like military training all over again - thats how I learned how to swim 50 years ago - was just thrown into the pool....
The one thing about micros, with my limited knowlege, is, I was taking small wins (MES) to preserve capital but that bodes nothing when you substract commissions and fees. Thereby making a winning trade actually a loser profit wise! I hope to figure out an effeftive strategy.
Thanks again for you reply
Can you help answer these questions from other members on NexusFi?
Tremd following inflection points
Asymmetric convex instruments - long calls/puts outrights
Catch trend momentum with 25-50 delta 0-1DTEs
1.5k is plenty of fund reserves to trade ETF options (QQQ, SPY) with $0.20-1 option premium Scaling, pyramiding, hedging technique - monetize countertrend while remaining in core trend.
Practice trade a micro S+P 500 until you have six consecutive weeks of positive trading where you are positive for each M-F week before trading any real money. I would work my day job, practice trade at night replaying the day session in 5 minute candlesticks, ~30-40 seconds each until I felt confidant I could make money trading, usually 1 year+. Some of the better traders swing trade. Street Smarts: High Probability Short Term Trading Strategies by Connners, Raschke.
Be prepared to lose that $1500 in a couple of days or weeks. If you can’t afford to lose that, don’t even start trading.
And if you manage to hang on to that $1500 or even increase it, be prepared to lose it anyway for being overconfident after that success!
My best advice to you and other aspiring traders would be to listen to Trader71, he is a member in this forum and runs a daily YouTube channel. (Search FuturesTrader71)
Every day, 30 mins before CME open, he hosts a market overview covering ES, NQ and CL. He comments on the overnight session, he comments on the news and he points out the planned news for the day. This overview can really save you from some blind spots.
His trading vision is based on volume profile. He suggests possible markets behavior after the opening and suggest the higher/lower levels when the market is moving. This can help you in discovering trading opportunities and also recognize when you are on the wrong site of the trade.
If futures margin can be used as a rough guide of historical volatility and therefore risk, the CME micro Australian dollar and micro Euro FX futures are a good starting place for a $1500 account when you decide to go live.
Their margins are currently between $200 and $400.
MES, the micro S&P 500 contract, currently has an initial margin of $1,445 -- absurd for a $1,500 account.
The MNQ is more like $2,400 or so.
If you must trade equities, you could try M2K and MYM, these days I think under $1K each. But even that seems way way big, proportionally.
Your first goals should probably be to learn some form of proper risk management and mental fitness for trading, and to follow the markets enough to get some sense of what is going on and how you are personally best suited to interact with them.
Thanks, I should have written SPAN margin required by the exchange, in this case CME Group. I was trying to keep it simple but of course you're right, many introducing brokers believe it makes business sense to front much of the margin for you. They're still maintaining that amount of margin for the FCM (Futures Commissions Merchant) who is behind them and who has it in turn for the exchange. The margin is still put up but the broker is doing it for you, making the bet that they can close your losing trades when you're out of cash fast enough that, beyond what was once in your account, you'll only owe an amount modest enough for them to collect from you. They can squeeze clients' lemons to the last drops of commissions. So this is useless as a risk metric. Let's remember that a leading cause of blown accounts is undercapitalization.
SPAN margin has different considerations:
The point is to use SPAN margin as an easy way of gauging risk. A new trader is going to need many trades to have any chance of developing, and that's just extremely unlikely to happen if they're trading too large.
In my way of thinking, they should be aware that the $1500 is pure risk capital but at the same time they should do everything possible to preserve and grow it. There is no reason why they cannot grow that account. There are however endless reasons why they might not, and why they might lose it all, and prominent among the top few reasons sits undercapitalization.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
That's actually not true. Margin is assessed by the exchange on positions held at the end of day - which for CME is the trading halt generally around 4pm US Central. Doesn't matter (to the CME) what your position is before or after that, just what it is at that time. If you close an open position immediately after the reopen, the margin is not released, and hence you can not withdraw the money, until the next EOD when the margin requirement disappears.
Ah ha, I'd misunderstood, or forgotten or otherwise gotten it wrong. Maintenance is required at the end of the day; makes perfect sense and is important. Thanks, and so also excuse me for misinforming others.
So is this correct? To initiate a trade, exchange-determined initial margin needs to be held by... the clearing firm. And then maintenance margin must be held at the end of the day, but intraday everything is kosher? And thus low day trading margins? The brokers will cut off traders at $50 in the case of some contracts, because they can probably cover the positions before they themselves owe money. But the initial margin is still a strict requirement, yes?
Also I was a bit harsh describing brokers with low day trading rates as the squeezers of lemons... It's a service that their clients want, sure.
I do use SPAN Margin as a rough gauge of market (historical) volatility. Do you have any thought on this?
Good post Lemmy. I would add that riding losses in hopes that the market will turn around will blow up your account which goes along with being undercapitalized.
If you have a $1500 account and you risk $200 then move your stop to $500 loss that would be too much risk for one trade in my opinion.
