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Is $10,000 sufficient?


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  #1 (permalink)
stdras
Houston, TX
 
Posts: 2 since Apr 2013
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Hello, I am relatively new to trading, but I have been studying the markets, for 4 years. I have read numerous books, sites, and webinars and now I am ready to give it my all. I am going to start trading for a living and would like to know if $10,000 enough capital to start with and if the Emini S&P too risky to try to learn and be comfortable with. Any suggestions would be greatly appreciated. THx

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  #3 (permalink)
 Brewer20 
Denver, CO
 
Experience: Intermediate
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stdras View Post
Hello, I am relatively new to trading, but I have been studying the markets, for 4 years. I have read numerous books, sites, and webinars and now I am ready to give it my all. I am going to start trading for a living and would like to know if $10,000 enough capital to start with and if the Emini S&P too risky to try to learn and be comfortable with. Any suggestions would be greatly appreciated. THx

If I understand your post correct: you have basically no trading experience. Your knowledge to date comes mainly from books and webinars. And you're suggesting you want to start trading for a living?

IMHO, there is no amount of capital that would be appropriate. It doesn't matter if you have $1,000,000.

You need to give yourself a lot of time to develop your strategy and hone your trading skills. On top of that, you need to master your emotions and psychology with regards to managing risk, profitable trades, and losing trades.

Once you have that down, you will need a whole lot more than $10,000.

I would keep your day job (or find one if you don't have one). Trade SIM until you are consistently profitable. Using TST combines is a great way to trade SIM, and maintain enough realism to provide a realistic psychological environment.

Meanwhile, keep saving your cash and pay off any debt you may have.

Sorry to be so frank, but you have a long road in front of you.

Plan your trade, trade your plan.
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  #4 (permalink)
 Cloudy 
desert CA
 
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stdras View Post
Hello, I am relatively new to trading, but I have been studying the markets, for 4 years. I have read numerous books, sites, and webinars and now I am ready to give it my all. I am going to start trading for a living and would like to know if $10,000 enough capital to start with and if the Emini S&P too risky to try to learn and be comfortable with. Any suggestions would be greatly appreciated. THx

Have you been trading sim during that time? Maybe start smaller with the expectation that the first account will most likely deplete to zero. You could also trade the M6E which is $1.25 per 1 contract per tick. (M6A can be traded afternoons and evenings) And you could try out a journal on futures.io (formerly BMT) at least for a while.

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  #5 (permalink)
 supermht 
Naperville IL
 
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stdras View Post
Hello, I am relatively new to trading, but I have been studying the markets, for 4 years. I have read numerous books, sites, and webinars and now I am ready to give it my all. I am going to start trading for a living and would like to know if $10,000 enough capital to start with and if the Emini S&P too risky to try to learn and be comfortable with. Any suggestions would be greatly appreciated. THx


reading book and doing research are different from actual trading.

sim trading for couple of months would be a good start.

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  #6 (permalink)
iankotze
thabazimbi limpopo/south africa
 
Posts: 27 since Oct 2012
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I agree with Brewer,

But if you insist on going for live trading, I suggest you trade 1 Dow contract. Have a daily stop of $100. Do not take more than 1 trade per day.

20 ticks stop should be good enough for you to find trade location. Just build up experience and once you have made 1k you have earned your right to either take 2 trades on a day or trade 2 contracts with 1 trade. As soon as your balance is below the 11k you go back to 1 contract, 1 trade.

On the down side, as soon as you lose 1k you stop trading and consider doing the tst combine.

If you don't have the patience and discipline to keep to 1 trade and the stop losses until you lose or make 1k then you must stop trading and work on that doing a tst combine.

I wish somebody gave me such advise when I first started out trading
Hope that helps,
Ian

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  #7 (permalink)
 FKtrader 
WA Europe
 
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iankotze View Post
I agree with Brewer,

But if you insist on going for live trading, I suggest you trade 1 Dow contract. Have a daily stop of $100. Do not take more than 1 trade per day.

20 ticks stop should be good enough for you to find trade location. Just build up experience and once you have made 1k you have earned your right to either take 2 trades on a day or trade 2 contracts with 1 trade. As soon as your balance is below the 11k you go back to 1 contract, 1 trade.

On the down side, as soon as you lose 1k you stop trading and consider doing the tst combine.

If you don't have the patience and discipline to keep to 1 trade and the stop losses until you lose or make 1k then you must stop trading and work on that doing a tst combine.

I wish somebody gave me such advise when I first started out trading
Hope that helps,
Ian

Totaly agree

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  #8 (permalink)
stdras
Houston, TX
 
Posts: 2 since Apr 2013
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I appreciate all of the feedback! Please keep 'em coming!

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  #9 (permalink)
 
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 Big Mike 
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  #10 (permalink)
 
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 khellian 
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To go from reading books to trading with a live account is a huge leap. What looks simple as can be on the pages of a book is a whole lot different when you have real money on the table. At the very least I would suggest honest paper trading for a while in a SIM account and keeping a trading journal that includes not only the how and why you got in and out of the trade, but your emotional reaction to the trade while it is playing out. Remember your best trading tool is between your ears and highly emotional plays are rarely good ones.

But trading for a living is a different game again when it comes to money management and the need to take living expenses from your account. Many traders consider they have had a good first year if the account is still intact with a minimal amount of profit, maybe 20%. (When I started I lost 50% of the account in my first year !) You're adding an inordinate amount of pressure for yourself by looking to your trading account to put food on the table. Even then $10k is a very small account indeed for even a consistently profitable trader to earn a living from.

IMHO, use SIM for a while and then when you get into live trading use it to supplement an income or better still build the account to a level where you don't need to clear 40% profit a month to survive. Try to get a job that allows you to trade and work while you're finding your feet.

I wish you the very best.

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Last Updated on July 9, 2013


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