if you had to start over...

[darthtrader]

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.

[cooter]

LOL. Those who don't admit that they didn't blow up or nearly kill their very first futures trading account must be world-class traders by now.

[weiwei]

darth trader, those are reachable goal on YM. but TS execution plateform, in my opinion, is not scalper friendly.

So make sure that you master how TS execute, and be comfortable with it.

[darthtrader]

thanks guys, great to hear 20 points is a reasonable goal.
Cant say how much I love this board already. Other boards ive been on it feels like I know more than the posters, on here I know absolutely nothing.....

[weiwei]

darthtrader, one way to get a feel of a market is to find out its daily average range.

It can be easily done with Excel after you imported the daily OHLC data.

It will then give you a view on if what you asking is realistic or not.

For YM, it puts in about 80 points a day. So 20 is not too much to ask. IMHO.

[cooter]

Originally Posted by weiwei darthtrader, one way to get a feel of a market is to find out its daily average range. It can be easily done with Excel after you imported the daily OHLC data. IMHO.

Why not just use Wilder's ATR on a daily chart?

Average True Range - Wikipedia, the free encyclopedia

[weiwei]

Cooter, that is ATR. as for me I am only interest for daily range for scalping purpose, which is (High - Low).

[The Bear]

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.

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.

[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.