[shooly76]

I started a very small acct in august ($3000)..and am becoming very discouraged..Ive been learning about trading futures for over 3 years..in the last year concentrated mainly on technical analysis..

I know it is unheard of to start this small, but its all I have. I just cant seem to get anywhere, some weeks Ill do ok..I got acct up to $3900 about 2 months ago. but that was it...since then its been back and forth..I cant EVER seem to reach any kind of monthly goals (160 ticks/month). hell...I cant even reach daily goals anymore..account seems to always stagnate at $3000...never can get ahead..

seems like my strategies works well for a few days, then I start hitting stops, then I switch it up, gain some ticks, then hit stops. I just feel like a hampster on a wheel lately...any input?

should I just start taking big risks (multiple contracts)? because honestly at this point it seems like its getting to be a lost cause trading a single contract.

[steve46]

Hi

If you are trading the S&P futures, I would suggest that it is almost impossible to make money as a one lot trader
.
Also there are other considerations...assuming you have a valid concept to trade, you need to be willling to endure drawdowns...with a small account that becomes impossible. So you're starting with the odds against you. You really need at least $10,000 to $20,000 min to make a go of it. If you can't get this kind of capital together I think your best bet is to sim trade.

From the standpoint of strategy, if you have a valid concept, you need to have the ability to focus consistently on the critical elements of your system (so that you don't miss trades), and you need to be disciplined enough to enter and stay with the trade long enough for your edge to kick in. Finally (just my opinion) you need a system for position sizing and profit taking. I suggest fixed fraction (some traders use 2% of account size) for position sizing, and in this market I suggest taking profit using a "scale out" system that takes partial profit at 2, 3, 5, 7 and 10 points. As you can see, you really can't do this with a $3,000 account.

There are two sides to trading, the mechanical and the psychological....once you have the mechanical stuff down, you need to have a way to maintain your mental status through the ups and downs. Just try to keep it simple, have faith in yourself and be patient.

Good luck
Steve

[TheNegotiator]

Hi shooly,

I wouldn't say it's impossible by any means on a $3k account. Very hard but not impossible. You have to have a strong work ethic and focus, superb discipline and realistic expectations of how well you might do and the time scale for building your account capital. Above all you need a bit of luck. Plenty of things can happen to screw you up and if your capital is low, it could wipe the account out. Don't start throwing on more size. That's frustration talking and if you are in that mode you will be bound to lose money.

One point that you should take heart from though is that if you are treading water trading a 1 lot over the last few months, you've actually done exceptionally well. The conditions currently are pretty wild at times. I reckon you probably are doing okay before commissions are factored in right?

If you really think you want to carry on trading live right now, which I am by no means suggesting or not, maybe consider your trade selection more carefully. What I mean by this is if something looks like it might give you an entry, don't just blindly trade it, look very carefully at what the market has done last and how your entry is looking on approach. If it doesn't look good, don't trade it. The best risk tool you have at your disposal is to choose not to trade.

[electroniclocal]

shooly76, its unlikely you can earn a living with just $3k capital, but you can learn how to trade.

Firstly, you should trade smaller, not larger so that the fear of loss is diminished.
Secondly, you should perfect your skills before you risk money and prove to yourelf that you are CP.
Thirdlly, you don't have funds to hire a mentor but you can self mentor yourself to a certain extent if you create a very specific written trading plan that fully describes your trading pictures: entries and exit rules after back testing.
Then, at the close of every day, score yourself on how compliant you were to your trading plan.

The result of this is that you will be profitable. If not, either you have not been compliant or your trading plan is really not profitable and your back testing was deficient.

EL

[Xiao si]

Lots of great advice here. Why not put together your plan properly and document it so you start to establish some rules and boundaries for yourself. Also, i used Mike Bellefiore's idea of the trading journal where you draw a line down the center of the page and write down what works, and what doesn't work on each side as the day passes. Eliminate what is not working and you have to improve. Check out my strategy document on my 'first day of my new trading business' thread, i uploaded my strat. plan for comment.

Finally, i can't say enough about the psychological element. As Steve's mentions it is extremely important that you know why you are doing things and you need to be aware of your emotions or you will not see the market through unbiased eyes.

Good luck and i think you've done darn well to even keep your capital so far. Also, consider using a simulator until you can acheive your goals on the sim for an extended period of time. This also helps condition you to losses (yes people, i know its not real money).

Cheers,


XS

[steve46]

For the original poster

I think that new traders trying to learn the S&P futures have trouble because that market is noisy. Most do not understand what the impact is on their trading. Generally what they experience is being whipsawed out of trades as the market takes out their stop, then reverses and proceeds without them. A couple of things that may help

First...know that the primary job of a trader is done when markets are closed....people that make money in this market do so by learning to observe market behavior and find little niches that allow them to profit. It can be something very simple, for example, the S&P futures tend to take out previous swings high and low by a few ticks or even a point or more, before reversing. This "testing" process is what causes traders to be whipsawed out of trades, and then the market reverses, leaving the trader with a loss or a small win, watching as the market continues away from them. Seeing this I decided to develop a way to see where those test point exist, AND I learned (again by observation) to locate specific times when the market is likely to move (based on tests of those "nodes"). My point is the market is right in front of you....anyone with eyes, a pencil and piece of paper can do it. You have to learn to be a good observer. This is my way...it may not fit you, but it is one way of dealing with a complex noisy market. I hope it helps.

Best Regards
Steve

[shooly76]

wow..thanks for all of the replies! mucho appreciated!

I do have specific rules for like 3 different strategies (each depending on particular market conditions and potential set-ups). but still having trouble..Ive actually been thinking about doing the opposite..IOW..when there is a long set-up, go short..and vice versa..lol.

another problem Im having lately is that I now have to trade at night (EST)..due to new job sked..I was having more success trading TF, NQ and YM between 10am-3pm EST...the night markets (6E, CL) seem to be harder to find trends, reversals...etc.. basically had tweak trend following strategy, and now almost scalping 2-4 ticks from some trades..but commisions too high for that..

[Tradewinds]

Originally Posted by shooly76 »

should I just start taking big risks (multiple contracts)? because honestly at this point it seems like its getting to be a lost cause trading a single contract.

What time of day do you trade? The open can be difficult. Slow times can be difficult. Areas of consolidation, etc. It's my opinion that you need to figure out when you are making money and when you aren't, and determine if it's the time of day, the market conditions, your emotional state, your state of mind, your attention span, etc. The assumption is often that it's the strategy, but that's only part of trading.

I have been video recording my trading, then reviewing it. I've never kept a journal, but reviewing what I actually did is helpful to me. I can see what I did right, and see what I did wrong, then go back over it in slow motion if I need to.

As I'm recording the video of my trading, I comment on what I'm thinking and why I'm doing what I'm doing. That way, I know what was going through my mind that led me to trade the way I did.

Actually, if your account isn't any less than what you started with, just that alone might be better than many people.

You mention getting stopped out. It's hard to know whether it would have been worth staying in the trade without some kind of objective way to measure what the results would have been. Is your strategy simple enough to backtest? I'm not saying that backtesting is the ultimate answer, I'm just saying it might give you some more information.

If your strategy is not simple enough to easily backtest, how do you decide what to do? Do you have well defined rules?

If you were trading more contracts, why would that make a difference? Would you be entering the trade at different price levels? That might average your entry price to something better, but you need a way of picking good entries to begin with. If you are picking good entries, but just missing the price enough to get stopped out, then I would trade more contracts, and place some of them for better and better entry prices. If your strategy is bad, trading more contracts will just loose more money.

I'm not a big fan of taking much drawdown. You must give the order a certain amount of drawdown leeway. It's impossible to avoid that. But if the order doesn't start moving in my direction very quickly, chances are the price is going to continue against me, or it's a consolidation area. If it's a consolidation area, you may need to wait a while for the price to start moving again. But you need an objective way to determine exactly what that consolidation range is, how wide it is, and what your account can deal with.