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What Dennis says here is the very core secret to winning at this business
of trading. This advice is more valuable than any indicator, system for
without this belief your doomed to fail. In fact your chances to fail not
believing and practicing this is near 95% , I think its 100%.
Leverage is has great value when the trader understands how to use it.
Robert
At 10:38 AM 8/10/00 -0700, Dennis Holverstott wrote:
> > The
> > basic premise was that the E-mini may not be the best place for a new
> > futures trader to start because there are other more efficient markets,
> > e.g., CME's Canadian dollar, giving the largest dollar move for the
> required
> > margin.
>
>What a crock! That's my gentle response. What I really think of that is
>unprintable. :-)
>
>Tim made the excellent point that you have to be well capitalized in
>this business. If a new trader is using so much leverage that margin
>requirements enter into the picture, he is almost certain to go broke.
>So, while the mini S&Ps are a very tough game, it has NOTHING to do with
>margin requirements. My suggestion for new traders is to not use any
>leverage starting out. An emini contract controls about $70K of stock so
>you should have that much in your account for each contract. Same thing
>for any other future. With that kind of capitalization, the new guy can
>make some mistakes and still survive. Once he learns the game, he can
>start using more leverage, but it's still unlikely that he should ever
>lever up so much that margin becomes a factor.
>
>--
> Dennis
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