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This is very good to hear and thank you for sharing @FastNCurious .
@goodoboy , I expect certain % of growth and honestly would be happy with anything over 20%. My unofficial goal is 'beat the S&P 500'. My results are better than that, thanks to what I have learned from the Strategy Factory. The difficult part for some folks is sticking through a system during a drawdown. It takes discipline to not pull the plug. For example, I was seeing a large drawdown earlier this month in one system, which was within my expected drawdown parameters, but would have been painful if I let it get to me. I took all the signals and currently have a position that makes up those losses.
I don't want to discourage you, but 20k is a small account and it will limit what you can trade and your diversification, until you are able to grow your account. It can be done, as FastNCurious shares. If you take the course, I strongly recommend submitting strategies to the Strategy Factory Club. Having one winning system and receiving the awards and bounty have been a huge boost to my inventory of tradable systems and gives me the flexibility to style my portfolio to my risk tolerance and goal of diversity. It also does great things to your self-esteem to pass the 6 month incubation.
I will send you an email with some info that you may find useful.
Thank you so much vmodus for taking time out your day to respond to me honestly. Yes, 20K is small, but I have to start somewhere and be happy about that until my account grows. Learning and having the right process is much better than having a bigger account size right now for me.
Seems like a trick question, but I'll bite. Assume we are strictly speaking futures, and not equities, options, or any derivatives. I suppose the minimum account size depends upon your trading goals and expectations. I need to trade a portfolio, so $50k is a reasonable starting point... for me. To trade the portfolio I want to trade, $100-150k is more reasonable. If I can pull in 30% returns, that is better than most CTA's. Of course, I want more, but I think that realistically, year in and year out, 30% is a good goal as a starting point.
So 30% on 50k is 15k per year. Pay some taxes on that, then I'm trading 63k, 30% on that is 18.6k. Repeat every year.
$20k is doable, but it limits what you can do, especially if you start with a drawdown, which could very well happen. So if you have a 5k drawdown, you have 15k in trading capital. Do you still have the discipline to stick with your system, or do you pull the plug? I think that if you are a very experienced and disciplined trader, you are okay with that if you trust your backtest (you should trust it if you did it right). If you are a less experience or even less disciplined trader, you pull the plug.
Recently I had a miserable couple weeks with a few of my systems. If I had panicked and pulled the plug, changed my portfolio, or fiddled with anything, I would have missed the subsequent two weeks of good recovery. I trust my systems, they test out well and they all have draw-downs, even my best ones. Earlier in my trading career, I would have interfered.
$20k is tight, because I've done it (I had one account start at $12k, very tight and just about impossible to be profitable with limited trading options). The margin rate for ES is $12,100 with my broker. The more you can start with, the better.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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I agree with what you said, but wonder whether the Micro's have changed that a little. Sure margin on ES is $12,100 but on MES its only $1,210. Margin on M6E (Euro) is about $250. MGC (Gold) it's about $1,000. New Micro crude next month should be around $600. So you could have a portfolio of S&P500, USD:EUR, Gold and Crude, and if all 4 are in a trade at the same time, the margin requirement is just over $3k!
Agreed that the micros has changed the game a lot and lowered the barrier to entry for a lot of traders. On the downside is the added cost. I'm not trading micros right now, but I thought I received a notice earlier this year regarding price increases in the micro commission or clearing (I can't seem to find the notice). Anyhow, are already priced at a premium to mini or full-size contracts.
For my own systems, oddly enough the systems I have for full size or mini contracts do not work for the micros. So that is a problem I have on my side. Go figure.
The biggest upside for micros might be in the ability to build a portfolio. The number of micros available now, as opposed to a year ago or so, allows us to do just that. I have not explored doing that quite yet, but it might align with some portfolio experimentation I've been doing.