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I agree Earl, but you gotta start somewhere. It's better to
lose $2000 several times than $100K once.
That said, $2K account = 95%+ chance of getting blown out.
Or even worse if you haven't done your homework and expect
strangers on a trading list to do it for you.
BTW, Sean, check mini FX...high relative costs, but low
tick size.
--- In realtraders@xxxxxxxxxxxxxxx, "EarlA" <earl.a@xxxx> wrote:
> With options, you must not only understand and anticipate market
direction
> but you must understand and anticipate changes in volatility ...
you just
> increased the complexity, therefore the degree of experience and
education
> required to be successful.
>
> I don't know why people think they can walk in and trade
successfully when
> any other high paying job takes substantial education and
experience ... the
> fact is they can't. To succeed, you must budget for the education,
the
> experience of executing many trades, and the cost of supporting
yourself
> while you acquire the education and experience. That is why you are
being
> told that a roulette wheel would be an good alternative to going
into the
> trading business with $2,000.
>
> Since you are dead set on doing this in spite of advice to the
contrary,
> then I suggest you do your own due diligence instead of expecting
someone
> else to do it for you ... it will be a start on your education:
>
> 1) Check near the back of Technical Analysis of Stocks and
Commodities
> magazine where they provide a list of the most liquid markets ...
these are
> the markets where you will have the least friction in executing
trades.
>
> 2) Visit the web site of several futures brokers and find their
list of
> margin requirements. Learn what the difference is between initial
and
> maintenance margin, then see which markets your $2,000 kitty will
allow you
> to post the required margin.
>
> 3) While at the broker website, see what the minimum initial
account size is
> so you can begin eliminating those brokers which will require more
than
> $2,000 to open an account.
>
> 4) Figure out what the stop loss per trade is for each losing trade
(plus a
> $25* commission and several ticks of slippage) and multiply by 60%
(many
> good traders routinely run 60% losing trades). Figure out what the
expected
> gain is for each winning trade (plus a $25 commission and several
ticks of
> slippage) and multiply by 40%. Now cut your win ratio in half from
40% to
> 20% for your first hundred trades and see how long your bankroll
will last.
> If it won't carry you through a hundred trades, then find another
contract
> or system to trade. Remember that just because you still have some
money
> left to lose, you must still post the required margin in order to
trade ...
> if your selected contract requires $1,000 margin then you are out of
> business once you lose $1,001.
>
> * you will pay a high commission because most reputable brokers
will not
> open a futures account with $2,000.
>
> If you decide to skip futures and trade something like QQQ or SPY,
study
> carefully the swings in premium/discount to the indexes ... there
is lots of
> slippage there unless you buy into declines and sell into rallies.
The good
> news is that you can probably last a bit longer because you are not
so
> highly leveraged.
>
> Good luck, you are going to need an extraordinary amount of it!
>
> Earl
>
> ----- Original Message -----
> From: "Sean Cassidy" <scassidy@xxxx>
> To: <e-mini_traders_anon@xxxxxxxxxxxxxxx>
> Cc: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Monday, October 13, 2003 4:58 PM
> Subject: [RT] Which Market????? Again
>
>
>
> Against my better judgement and advice here, I am cosidering
trading a very
> small account with a method I trust. I want to trade a market that
haas the
> smallest risk per trade in dollars.
>
> Im being told options on the bonds will offer me that opportunity.
Any
> advice on which market has the smallest per tick moves....and which
moves
> the most consistently?
>
> SMC
>
> PS I Know and accept the unlikelihood of this, and know it is very
very
> risky, please just let me know which markets you would trade if you
had to
> make small but consitent trades.
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