Looking To Begin Trading Futures: $$ Losses

[Andrew28]

Hi folks. This is my first post in this forum. I am new to the futures market but not quite new to trading. I started messing with the stock market back in the late 90's when anyone could of made money buying blindly. I am now retired and would like to consider trading actively full-time. I started reading several books on technical analysis, commodities, and futures as I would like to learn to trade properly.

I have about $20,000 of risk money that I consider as tuition as I understand this can be quite a difficult profession. My main goal is to be able to make a living trading. I am here to seek a little advice on my current road block I am encountering. This is my third month trading the futures market and I have lost roughly 40% of my initial stake. I practice strict money management and place approximately 3 trades a day. I am still at a point where I have not yet settled down on one method; still testing out various techniques.

Any advice to get me going in the right direction would be appreciated. Thank you.

[Soultrader]

I think you are on the right track towards learning this game. If you are willing to put up $20,000 as tuition money you will have plenty of room to learn. Just make sure you trade small until you are able to establish consistency.

To comment on trading methodologies, you are at a phase of experimenting with various methods. I suggest you continue to do so but eventually start developing your own. Your methodology should be branded by you. This allows you to have your own trading style.

Learn the pyschological side of trading. Losing 40% of your stake is painful... but make sure to keep a trading journal and learn from all the mistakes you have made and will continue to make.

[budman]

Andrew,

if I were you, I would only be trading one contract at a time. When you've been profitable for few months, move up to two etc. Paper trading is not the same. You need money on the line to experience your real emotions.
If I could start over, this is what I would have done.

I started with 2 contracts. After a few winning trades I jumped to 4 etc. Within weeks I was trading 20 contracts...big mistake. I lost so much money because I thought I knew what I was doing. Looking back, I would have been much better off if I stayed with one contract for a few months while learning this business. After all, it is a business.

[carter]

As much as you can learn from your own mistakes, you can also learn from another persons mistake. Budman has some really good advices for any novice trader.

I also recommend starting off with 1 or 2 contrracts. Trading is a business and a skill game. During the bubble, no skill was necessary to make money. But with current market conditions, this is the true trading arena. Master the skill or you will lose.

Good luck on your journey Andrew. Most traders have been where you are. Those who climb out of it are the traders that will make it in this business.

[Andrew28]

So basically I should start small and work my way up. I would like to know some strategies that work in the futures market. Can a trader apply the same strategies in trading stocks or forex to the futures market?

[FLX]

You need to list your mistake each time you trade to confirm cont. pattern that is developing. Like your writing Trading bible for yourself. Your will find your self doing the same mistake over and over. This is the only way your can start to trade properly.
My major mistake is not draw trend line and s/r line on all my charts. That is the biggest one right there!
A trade just broke through the S/R line right now im in the ER trade right now with a tight stop! Got to go it running hard!

[Kiwi]

1. Stop trading with money NOW
2. Paper trade until you find a method you are winning consistently with.

Although we all did it, its stupid to waste your capital while you are searching for a method still. STUPID

Learn patience. One element is being patient enough to trade on paper until you have no less than three winning weeks (really winning not just scraping in with a bit of luck). Another element is being patient enough not to use money until you find a method that works with you. Another element is being patient while waiting for a trade.

STOP now. Be patient. Find a method. Paper Trade until its second nature. Then work thru any psychological issues after you move to cash.

Your stake is way too small to waste it until you have a consistent method and a solid trading plan. Money management just creates a slow drip of blood as you cut yourself with a small knife.

[FLX]

The last few posts is the best information we could give at this time, kiwi approach is very similar to my own. It might take you two year but look what you can lose in that period of time. What is your hurry enjoy your retirement, and the trading will soon follow. You need to practice before you can walk out on that stage. Flx I made 500 per contract, in the ER2 today but it took me 2 1/4 years to get where im at today.

[Bfbusa]

Hello Andrew28,

Along with the other posts I also suggest this.

Review ALL the videos in the video section. Pay particular attention to Tape reading, pivot points and Value area high and lows. SoulTrader does a fine job in getting the idea of the methodology and tools needed to trade the futures successfully. Also look in the chart section.
Then pick a futures contract that best suites your personality. For me it's the YM's. Others are the NQ's, ES or the ER2. But I would recommend the YM's. The Dow mini. Each contract is only $5 per tic. So you won't lose as much during your learning curve. Just start with one or two contracts.

Keep to your stops and as soon as you partially exit ( if doing 2 or more lots) a trade at your first target always bring your remaining contract to break even. You just guaranteed yourself a profit w/o the emotional baggage.

After you have viewed the videos here got to TradeTheMarkets.com and sign up for their free e-mail videos.

Hope this helps.

[werdgr]

Hi,
I am new just like Andrew28.
I also have $20,000 to start to learn and hopefully master it to a point that i can walk by myself.
Any direction is appreciated.
Since i work during the day and only available to trade few hours at night and Saturday.
I am living in NorthEast US.
Thanks,