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Shawn,
You left out a lot of details, and the devil is in the details. What's
the meaning of "Basket"? Does it mean if you want to be long equities,
you would go long x ES, y ER2, z YM and so on and so forth? Or would you
decide which contract to trade? Would would be flat end of the day as a
rule? Is your strategy back tested? What's the drawdown? How many
consecutive losers can you put up with? What's "ruin"? Stuff like that.
Many here has said & undoubtedly say again, $30k capital is too little.
I won't go there and let you make your conclusions. But we can sure do
some "back of the envelope" calculations. It does seem the capital is
too little for you to run strategies for a basket. It also seems that as
a "daytrader", you must be fast on the trigger, and may have trouble
managing multiple instruments (and having to make multiple decisions)
simultaneously if your strategies are not completely automated.
Average margin for each e-mini is say $3500. You need about $25000 to
take a position in each. So, with a $30k startup capital, a $5k DD would
prevent you from executing your position.
Also, trading at full margin would probably mess up pretty much any MM
calculation. (I would not consider $500 day margin shops for this
discussion).
Everyone's different. But I can tell you what I would do with $30k. I
would focus on one equity market. I would choose ER2 for it's range. I
would also trade EUR futures as they move somewhat independently of each
other. But I would stop there. I can't manage more than 2 in a
discretionary way in "daytrade".
It would be very important to know what your profitability expectation
is. Since you are "daytrading", I would assume you want to make a
living. So, would you need to make $50k (say) after tax to cover
everything? Not only that, you would need to make that $50k + tax "very
consistently".
Again, how much DD is ok? How frequently must you "raid" your account to
pay bills?
Hopefully this gives you a few ideas to think about.
Regards & good trading to you. Greenie's meeting is about over - back to
work.
Abhijit
PS : Excel is your friend. Punch some numbers, use rand() weighted by
your profitability expectations, and take it for a spin.
smh1@xxxxxxxxxxx wrote:
Hello all...
In the new year I'm planning to daytrade a basket of around 6 or 7
different e-mini contracts (e-mini S&P, e-mini Nasdaq, etc.). My
starting capital will be around US$30,000 and I'm just wondering
what sort of money management/position sizing strategy would be
optimal (and keep me out of "ruination").
Should I allocate a similar dollar amount evenly to each of my 7
instruments and treat each individually, or should I treat them all as
one singular 'basket?. It's a toughie. Any input would be most
appreciated!
Cheers
Shawn
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