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Hope all you guys have had a wonderful and profitable week.
I wanna start to trade FX Futures, but I'm struggling with lot size and account size questions. I just wanna trade currencies and I'm thinking about use 1 contract for each $30k in balance. This is reasonable or seems extremely risky?
Can you help answer these questions from other members on NexusFi?
Not risky at all in my opinion. I have read broker's/knowledgeable people suggest a rule of thumb of one contract for every $10k account balance. For very thick products during slower moving times (before the Covid volatility), such as US Treasury Notes, you could use more. For very thin fast moving products you may not want to.
In the post linked below FT71 gives an example with three contracts for a $25k account. I would classify the ES as mid range volatility, probably similar to currencies. FT71 ran a brokerage for a while and guides/teaches traders so his "example with some fair assumptions" could be a reasonable starting point.
NOTICE: This is provided as an example with some fair assumptions. Derivatives trading is not suitable for all investors. This is provided as an educational example only and is not a recommendation to trade or to indicate …
"You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade" - Gary Norden
Everyone's risk tolerance is different but like Matthew mentioned 1 contract for every 10k is what I do also... know when to hold them, know when to fold them. Learn how to use momentum to add or scale out.
