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Trading is 90% psychology and 10% technique. Thus, aside from building
enough confidence to pull the trigger the first few times, paper trading is
of relatively little value. Thus, you are wise to impose the 2% limit.
Some techniques to reduce your emini slippage:
a) use electronic order entry
b) use limit and/or stop limit (.25 spread) orders to enter
c) use stop limit (20* handle spread) orders for stops
Unlike stop orders, stop limit orders are held in the exchange computers and
are the first to be triggered when a stop price is hit. This is something I
learned from my exchanges here with John Lothian
(http://www.pricegroupetd.com/) and the use of stop limit orders has reduced
my slippage significantly.
I use .25 spread on entry to controls slippage (I have never missed an entry
and rarely get the .25 slippage) and the 20* handle spread on stop loss to
give it plenty of range for execution to insure I get out.
20* handles in the emini is the approximate maximum spread between stop and
limit on stop limit order which will be accepted by Globex without rejecting
the order. The exact rules are not disclosed on the CME pages and do not
jive with the quarterly limits.
Earl
----- Original Message -----
From: "Sean Cassidy" <scassidy@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, November 08, 2001 9:37 PM
Subject: Re: [RT] Day Trade the emini?
Kevin, My standard risk per trade will be 2% of my equity which will be
$200. So yes I could change to the mini snp and have a plan to do that as
well but the problem is it is somewhat subjective and impossible to
backtest. I would hate to start out 0 for 5 and lose 10% of my
account.....in one day. Paper trading is going great and i doubt this will
ever happen.....i guess its time to take some (potential) pain. I just hate
to abondon my stock trading which is going so well.
----- Original Message -----
From: kevin miles
To: realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, November 08, 2001 3:41 PM
Subject: Re: [RT] Day Trade the emini?
Sean,
given your standard risk per trade on your swing trading system, how many
points will you have to risk per trade to trade the mini? how much
percentage is each risk per trade of your account?
are you willing to adopt a new trading style to day trade the minis?
i find support/resistacne (and the pivots) to be quite key in the indexes.
i apply these to the snp mini.
depending on your risk per trade, you could very likely have enough to
trade the minis...
kevin
----- Original Message -----
From: Sean Cassidy
To: realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, November 08, 2001 8:28 PM
Subject: [RT] Day Trade the emini?
But would you daytrade the S&P emini? I simply dont have enough cash to
use a sufficient swing trading stop. I have also found the quality of the
fills to be better than stocks but the brokers we have used anyway have not
always been very good in terms of losing fills etc. I have had raesonable
succes paper daytrading the emini S&P off of the pivot and support lines.
----- Original Message -----
From: Norman Winski
To: realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, November 08, 2001 2:07 PM
Subject: Re: [RT] The SEC just regulated me out of a job........
Earl,
I must respectfully disagree with some of your statments below. If
one
takes small positions in futures, there is no reason one can not
achieve a
diferisified porfolio with $25,000. I also think that most ag
futures are
easier to trade than stocks, as the historical ranges tend to be much
more
predictable. Additionally, I find the fills in futures to be faster
and
better than stocks. On the other hand, I wouldn't recommend day
trading most
commodities, but then again I wouldn't recommend day trading most
stocks, as
I think it is a fool's paradise and a broker's dream.
Respectfully,
Norman
----- Original Message -----
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, November 08, 2001 8:26 AM
Subject: Re: [RT] The SEC just regulated me out of a job........
> If there is one thing I harp on for new traders, it is adequate
> capitalization and maintaining a conservative risk per trade profile
which
> will insure that a few bad trades do not bust the account. While an
account
> size of less than $25,000 may be adequate for some modest trading in
stocks,
> it is not adequate for trading futures unless one has a pool of
substantial
> liquid assets which can be immediately re-deployed to the futures
account.
> Secondly, the prudent trader will risk no more than 2-3% of account
size
per
> trade ... and one must keep in mind that sudden moves combined with
high
> leverage in futures can blow a trade right through the stops and
blow out
> the account. Just recently bond traders were treated to a near
> instantaneous $2,500 per contract move which blew through stops.
>
> Finally, I would mention that trading stocks is a simpler task than
trading
> futures. While the emini are most similar to stocks, agricultural
and
> industrial futures contracts are an entirely different animal and
are not
as
> well regulated as stocks ... in many cases the pit trading is
stacked
> heavily against small traders.
>
> Earl
>
> ----- Original Message -----
> From: "Norman Winski" <nwinski@xxxxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, November 07, 2001 5:55 PM
> Subject: Re: [RT] The SEC just regulated me out of a job........
>
>
> Sean,
>
> I think you are right, you should go with trading the E-Minis. Of
course,
> if you don't like working so hard, I would just buy futures on some
of
those
> rediculously depressed commodities that on any any thought of
economic
> recovery will sprint at least 20-40%.
> I have been extolling the virtures of Coffee, Cotton, Copper,
Soybeans,
> Silver, & Sugar on this and other lists for several weeks. For
example,
> since the low about two weeks ago, Dec. Cotton has rallied from 2820
to
3223
> = over $2,000. Most of these markets have margin requitements that
are
> between $1,000 - $1,500. Of course, I don't recommend using all
equity
for
> margin, in fact I try to maintain a 5 to 1 ratio of equity to
margin. When
I
> get very agressive, I may let this ratio drop to 3 to 1. Anyway,
there
are
> still some great deals out there and all you have to do is put on
the
> positions and wait. Some of these markets are at 30-40 year price
lows.
If
> you buy them now, and they only get back to their old support
levels, you
> will make lots of money without much work or spending a fortune for
> brokerage commissions.
>
> Of course past results is no guarantee of future performance. .
This
type
> of investment may not be appropriate for your retirement account,
your
kid's
> college fund, or Aunt Tillie in Toledo's bingo fund. You can lose
> everything you have ever had or will ever hope to have trading
futures or
> stocks, especially if you follow my advice and everyone stops
eating,
> drinking coffee, using electronics, or stops using clothing or
blankets.
>
> Best Wishes,
>
> Norman
>
> ----- Original Message -----
> From: Sean Cassidy
> To: realtraders@xxxxxxxxxxxxxxx
> Sent: Wednesday, November 07, 2001 2:10 PM
> Subject: [RT] The SEC just regulated me out of a job........
>
>
> I was just informed by my broker that I am fortunate enough to
meet the
> SECs rewuirements as a "Day Trader". I have been essentially swing
trading
a
> small account because, well, I dont have enough cash to open a big
account.
> I tend to get out of my losers very quickly and hold on to my
winners for
2
> or more days. I thought thats what trading was, cut your losses, let
your
> winners run. For example I had 2 longs and 1 short going into
yesterdays
> rate cut. My short (INTU) was stopped out for a $1.30 loser but one
of my
> longs (WEBX) made me $3.50 and another (EBAY) is currently up about
$2.
This
> of course makes me a day trader although i held WEBX for 3 days and
have
had
> EBAY for 2 and counting. The reason is that about 5 times a week a
trade
> goes bad and I have to get out in the same day. My plan is working
very
> well, I am up about 5 points this week already and make at least a
little
> money almost every week. But because I do not have $25000 the SEC
has
forced
> my broker to shut down my account for a week. I am currently
averaging a
> return of about 10 -13%....per month. I think I know the answer to
this
but
> outside of finding a loan shark.........is there anything I can do
about
> this?
>
> By the way......I am allowed to trade futures and/or options. I
think I
am
> about 2 for 20 on options trades over the years and accept the fact
that,
at
> this point, I just dont have enough knowledge to make money with
them. Or
I
> could trade the E MIni S&P, with its margin of 10:1...that is
obviously
much
> less risky than doing 50 to 100 share lots of a stock with a proven
method
> (sarcasm).
>
> Any help would be appreciated...or maybe I just needed to vent a
> little....looks like I am shut down after making 10% most months. I
am now
> going to look for my man Huggy Bear to see if I can get one of those
88%
> (per month) easy payment loans.
>
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