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I mean money u blow or given to the market before you start being consistent. In another word, the tuition fee you pay to the market to learn your mistakes. Obviously this differs between individuals but at least be mentally and financially prepared to pay up during the process of learning.
It's just my personal opinion but your trading account need to be proportional to the time frame and product your trade risk management is the key.
If you want to trade and make an income out of it sure you need some capital but if you want to learn start small less than 1% of your capital so the psychological damage is lower because the psychological damage is what damage and influence you not the financial damage.
Ask your self this question if I lose this next trade would it bother me?
If yes reduce your risk,period.
About 2 contract and scaling out.
It depend on your strategy.
If your target happens to be more than often the point we're the market turn and you are right then actually scaling out is going to make your risk reward lower.
If you tend to get out too early and the market still go in your favor most of the time then yes scaling out might be the best solution.
I like ft71 way of thinking but he said it himself do not trust anything of what I say you need to try and do your homework on your self.
Stop thinking about making 500 a day or anything like that,
The goal at the beginning is do I follow my rule,do I have an edge and then when you can prove that you can then increase size accordingly.
If it took you 5 years of saving to build you account how would you feel about loosing 1% of it?
Let's say you have 100 000.
1 year saving is 20000.
1 month is 1666.
If you trade 1% per trade and you loose and you will at time loose 3 time in a row you loose 3000 in one day.
Which corresponds to 2 months of savings,would you feel comfortable with that?
That's the question I think really matter.
Trading is already hard enough so let's not make it harder
That's just my opinion.
It comes back to how you measure success. If you measure success by whether you follow your trading plan and if you have an exploitable edge then the amount of capital is irrelevant.
I don't have a problem with risking 1% of your trading capital on any single trade as long as you have the discipline to follow your plan and your edge has a positive expectancy.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
If you are fine risking 1% than by all means go for it.
I'm just saying if you can't be profitable with a small account on the micro product with a small account the likelihood of you being profitable is really low even with a big account if you start trading.
Money is a result of you being good at trading.
My goal is to buy were I think other traders are going to buy after me or sell if I believe other trader will sell after me period that is my work/goal.
If you can do that constantly then money you will receive.
When a Mike Tyson or McGregor go into the ring they focus on winning the match not on money they are going to make.
Like a surgeon if operate and do is work well will receive a good salary.
For a starting trader focusing on ticks made over lost is what leads to improvement.
If you think about money most of people and myself include tend to have less clear judgement and start to dream if I make this a day then In one year I'm a millionaire.
Forget the money,I've been there it's not helping.
I think the amount of money you need to be successful with depends entirely on your trading plan. The money follows the plan and definitely not the other way around.
So, in regards to number of contracts traded, it depends on your plan. If your plan is one contract then that's that. If your plan is to trade multiple contracts, then that may work for you as well. Overall, decide on what trades (and components like instrument choice, hours to trade, edge and the testing of it, education, etc) will work best for you and then start plugging in the dollars into the equation. Otherwise, a scarcity mindset my hold you back.
My first question ever to the people who educate was will 6k be enough to start with. The answer did not make a bit of difference. Except when the question was out of the way I was able to focus more on learning the action of trade execution.
Regardless, the survey and ensuing discussion has been good.
I agree. If you don't have an edge it doesn't matter what you account size is you will more than likely lose money.
That may or may not be an accurate statement. If you trade small enough and often enough, trading expenses can eat up your profits even if you have a winning strategy. Being under capitalized can make a difference.
Granted but they get paid whether they win or lose and they know and accept the risk that they might lose. Unlike a trader they can't control their risk.
Ticks = money. Focus on the process. What to trade, when to trade, how much to trade and when to exit your position.
It is much easier to trade if you start with a million. The amount of capital does matter.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Subjective question. The answer differs depending on experience and circumstances. Generally I'd say the more capital you can invest the better, this also has implications for the amount of per trade risk you take on. Which for a new trader is a helpful control mechanism.
Whatever the amount capital preservation is prime.
But as someone has said earlier, if you're a pro you can in most cases trade with any account size and be incrementally successful in your work. I saw a website recently where a chap in the UK was trying to trade 10k to 100k over 24months, he was a pro trader and I believe he was successful. Illustrates that point aptly.
All you need to learn to trade is $1. Open an account with OANDA, fund it with $1 and with their flexible position sizing, you even have the ability to average down, pyramid up and scale out. Except for spreads around news events, I never had any issues with them and I did check their prices to Bloomberg if I felt my stop was hunted. Here is even a link to a trader's blog who turned $500 into $20,000 - Infiniteyield Forex. He was providing signals for his fx trades and not for his silver trades, but I recall him being bullish silver well before it started moving. So the results are most likely legit.
If you wish to trade futures and you need to ask the question, then you probably should not be trading futures. Generally before you start trading, you need to have a good idea of the margin required, the size of your expected losses, a sufficient buffer to cover a string of losses and a bit more in reserve in case you underestimated your capability to lose. So as you can see these numbers vary from trader to trader, and even then there is no guarantee of success.
During 2008 I saw several star hedge funds close down due to higher than expected losses. These guys were experts at buying the dips, but could not handle the 2008 crash. Then to add insult to injury, a lot of these funds closed their old funds, and tried to persuade their clients to join their newly created funds. Reason for this was quite simply that it would take too long for them to recover their High-Water Mark and earn performance fees. Just goes to show that even "pros" can also blow up.
What does this have to do with trading size account? Ed Seykota calls it "start-date dependency". Certain styles of trading suit certain markets and if you have the right style and the right market, you will need much less capital to succeed than when those two ingredients are not aligned.
If you haven't guessed it yet, if all things fall into place a small account can succeed at trading, but in reality larger accounts have much more leeway when things don't work. Up to each individual trader to decide how much he is willing to lose and then work within those parameters to make it work (or not).
The amount of capital does matter.