[BlowFish]

Originally Posted by darthtradar »

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.

They sound like pretty good ballpark figures. Certainly not totally un-realistic expectations that some have.

I have never blown up an account though I have suffered the thousand cuts...it just hasn't resulted in death. I guess one thing I was pretty good at was realising fairly quick when things weren't working. It doesn't take that much to see your account is steadily going down rather than up. I have still managed to do reasonable damage to a couple of accounts though not managed a real spectacular blow up.

They say that once you have enjoyed sustained success you become vulnerable to blow up again. Over confidence I guess. I'm looking forward to blowing one of those multi million dollar babies (again expecting that I will pull the plug somewhere between 25%-50% drawdown).

[bakrob99]

Your 10 pt. stop loss is a little tight ... if you are trading the YM 10 points means you have to be quite accurate in your trading entry... whereas 15 points will keep you in more potentially winning trades. My system uses 15 points hard stop and is currently running at 88% win/loss ratio. That means it hits its 1st target 88% of the time before it hits 15 points against. I have found 15 points to be more profitable than 10 but mostly because I only get stopped 1 in 9 trades.

Also - trading on TS ... you can use limit orders to enter to ensure the right price and avoid "chasing" ... exit on tick extremes or pivot levels with a market order ...

BY the way - if you add a contract every time your account grows by the minimum amount to add a contract ... and keep doing that - you will make well over $1.0 million within 6 months ASSUMING you acheive 20 points per day (the actual amount is much higher)

Good luck.

[Nick1984]

WOW 1 million dolla!!!

Wheres the nearest bank, I can't wait to turn my 5k margin loan into a million into 6 months! Why has nobody told me this before!

Screw university, who needs education, we all need 20 points a day weeeeeeeeeeeeeeeeeeeee.

20 YM points is what?

2 points on the ES?

2 points on the Ags - ZC, ZW, and ZS (CBOT Corn, Wheat and Soybeans)?

If that's the case, I should be a millionaire several times over by now

LOL

[ItalianSharp]

I don't think it's a good idea to have a fixed profit target or a fixed stoploss. I used to do that but didn't have much success with it. I've started to become successful since I got rid of all those fixed numbers, risk/reward, etc...and adopted a more flexible mind instead...

Basically, today I am more focused on the markets, the order flow, etc...rather than ratios, targets, stops, etc...

[bakrob99]

So Cooter
Can you honestly say that you make 20 pts x All the contracts Traded Every Day on the YM (or equivalent 2pts ES)...

Every Day ?

If so ... what keeps you from increasing size as your account grows?

Don't trade the YM, so I can't speak to that.

But since I do trade the grains....2 cents is comparatively easy (same as 2 pts on ES).

The hard part is NOT giving it all away.

That's what keeps me from exponentially increasing size on my account.

I'm at the point where I can afford to "keep it simple" and enjoy whatever the day has in store for me.

[darthtrader]

thanks guys, good food for thought.

i'm certainly not a get rich quick type, i actually read books for a year before i felt i could even place my first stock trade.

i guess i will have to see how it goes with a 10 point stop. with this first 5k account i will be looking to get max screen time as opposed to making money. i'm kind of hoping the 10 point stop forces me to only take the best entry point and then 20 points and out will force me from giving things back on a winning trade. I will explore 15 though.

i guess market orders must really suck on TS. would it make more sense to open an account with another broker along with TS? turn 10 trips a month on TS then use the other broker after? is it really that bad on TS? I have heard so much negative stuff about TS as a broker.