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how would you setup your first index futures account/strategy/risk management/position size/profit target?
i just closed out my last swing trade today so should be getting setup in the next few weeks. i'm looking to open a $5k tradestation account. trade YM, 1 contract.
i have been thinking a 10 point stop, 20 point daily profit target. do those sound reasonable? I would like to then add in another 5k to the account once i'm consistent to be able to scale with 2 contracts.
any general mistakes anyone made they would like to share that might be able to avoid?
also, did anyone not blow up their first account? I realize that may be a given on this account. |
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I think it's very doable with a 5K account, but just stick to trading 1 contract for the next year. I checked my records for you, in my first year as a speculator I had a drawdown in the account of 8.2%, so according to my records I did not blow up the account, this included commission fees. This was mainly trading the YM short term. That was about 300 round turn trades. If you are disciplined, you can minimize blowing up any accounts the first year.
Don't get obsessed with making money or your 20 points per day. If you can break even in the first year or two for futures (including commissions), you probably have a bright future.