By all means trade stocks if you like them. October 14, 8: Exposure to large and mid-sized companies in Hong Kong. And very few people that have determination. A good trader can pull money out of the market at will.
The CME imposes position limits on traders…. You would likely experience problems before these limits though. As you start getting bigger and even in the 10 to 30 contract range you will start to get partially filled on your winning trades but always receive all the contracts on a losing trade. Here, it is your capital that will cap your position size. I want to start trading but not not got a trading account yet, but my question is when I do set a trading account up what is the lease amount of money I can put in my trading account where I can start making a good amount of money.
How much capital you need varies by market, and whether you want to day trade or swing trade. Since this is a day trading article, I will assume you are interested in day trading. For how much money you need to day trade, see: Open a real account only after you have proven to yourself that you can profitable in a demo account for several months in a row. You can eventually make a living off that. This does take time though—expect to practice for at least 6 months to a year before you start to see profitable returns in a demo account.
Then another few months to acclimatize yourself to trading with real money. So it is possible, but not common. I prefer boring any day. I trade the trends that occur, and step aside for news events only entering after into normal trend trades. My bread and butter is being able to trade everyday boring moves. For some people, there may be more opportunity in some markets than others, but for me, I do the exact same thing no matter what market I trade, so the results are pretty much exactly the same.
I do trade big momentum moves as they occur in forex, stocks and futures. Some days are bigger, but that is just what the market provides, and not a function of the market I am trading. All markets provide ample opportunity way more than any trader can take advantage of. Of course, each person trades in their own way, so if they have a strategy that works on stock-based news events, but nothing else, then they should trade stocks. But I can only speak for me. I focus on boring everyday trends, which makes how I trade fairly universal across markets, and not much changes when I switch from one market to another…except that stocks require a lot more capital for the same return I get elsewhere.
I should also point out that I could care less if I am trading against all algos. If you talked to forex traders, they will say that trading forex is great.
If you talk to futures traders they will say trading futures is great. All these markets exist because people succeed at trading them while the mast majority lose.
Whether you trade stocks, forex or futures, your odds or success are the same low! By all means trade stocks if you like them. But forex and futures are also viable options. Put 6 months to a year of hard work into any market, and your odds of success are the same, and your income likely will be as well. Have traded all three markets, profitably, for multiple years, I can say that without question.
The only difference is the capital you need to trade them and a few details like trading hours, etc. But that said, trade what interests you most. I agree that the good traders stay silent. Thanks for your knowledgeable response. I just still disagree with your analysis of returns possible in FX and futures. If they could, they would be managing a successful, small hedge fund and the world would know about it. I just think you should be steering newer traders away from FX and futures if possible since it is way harder to find trades with context and tempting to overtrade.
Technical trading alone in FX and futures can still lead to big drawdowns. And how could any new trader expect to compete with algos anyway?
So you are correct, as soon as large sums of money hedge fund are involved, the returns drop because it becomes harder to find liquidity and great trades with more capital …but my focus here is the individual trader, who CAN make seemingly high returns.
There is so much money passing back and forth that based on my strategies it seems to be the easiest to day trade. Futures are also good, and another market I really like because of the inherent leverage in them.
But I disagree on steering traders away from futures and FX. If you know what you are looking for, these are more lucrative markets, because much less capital can be utilized effectively. So with pretty much everything being equal, I choose forex or futures because they are more accessible to the person starting out with a smaller bankroll.
So you need to be losing all trades and not winning any to see any significant drawdown…and since our winners are bigger than losers it takes less winners to make back the loss.
So with a good strategy drawdowns are minimal, and in a worst case scenario it is a VERY slow capital drain, but if this is happening the trader can hopefully work on finding the issue that is causing the drain in capital before it becomes significant. Cory, thank you again for your diligent response. You are clearly passionate about this industry and about helping others.
It is evident in your patient thought and articulate delivery. Less successful traders than you who would have quickly dismissed my first question and then arrogantly summarized my commitment and character.
Some of these traders worked very hard and still failed. I wish I would have engaged some good mentors early on. Most of my trading knowledge was built by observing and reading about every good trader I could find.
Almost doubled my money until I got burnt out and lost control of my emotions. From that experience, I learned that good health is just as important as any trading strategy.
I know it sounds wacky, but I believe in adrenal fatigue, and I think adrenaline does often flow during trading. But there are ways to effectively manage it. I did this while working a full-time job. It was always interesting trying to speak intelligently on an incoming call while managing an erratic position. Anyway, my family kind of lost faith in trading as income after that, or whether it was even healthy. But given that a vet like you says there are opportunities in every market, I believe it.
I have recently taken an interest in futures. I know you mentioned Daytrading Academy. My only concern with them is that I have not seen the lead traders offer any live trading statements to tradingschoolsorg for example.
Look forward to transferring some of my skills in equities to futures using a gentle approach that starts in demo! Here is an article that discusses what you are talking about…adrenaline fatigue…although this article refers to it as self-control fatigue. Self-Control In Day Trading: The Biological Factors https: As for The Day Trading Academy…I have taken their course I had already been a trader for 8 or 9 years, but knew some traders with the DTA and wanted to see what they were learning.
I thought it was a great program. Although they trade in a similar fashion to me, so I liked that. I think it was Forex I was trading with. So my question is how do I trade if I want to start trading again and to earn an income all so how much can I earn per month, or does it go off how much I put in my my trading account thanks and kind regards Mark Wheatley. It takes time to learn how to trade. It is not something where you can deposit some money and hope to make a consistent profit. Also, the advice of a broker will likely never make you money.
I would also recommend starting with more than The demo trading should reflect as accurately as possibly how you will trade in the real money account. Your demo account should be showing a profit each month, for several months in a row, before you open another account with real money.
Your income potential will vary. Expect to lose money the first few months once you open the live account after months of demo trading. Trading real money is psychologically tougher than trading a demo account, so it can take some time to adjust. After that, your income is up to you.
There are lots of free tutorials on the site, under the trading tutorials menu. There is also the Forex Strategies Guide which provides a more thorough overview of forex trading. Your dedication to trading is admirable. They are grossly exaggerated. They mislead anyone who wants to be in the profession. Also, the potential in futures and forex is way lower due to the talent of those competing.
Also more volatility opportunities in stocks. This is what you can make, not what you will make. Most people who attempt trading are never even profitable…that is clearly stated with several links provided in the article to actual stats. This level is reserved for those who dedicate themselves not only to understanding the market, but understanding how to practice and how to control their personal tendencies.
I have multiple articles on the site stating your chances at day trading success are slim based solely on the numbers. But if you are one of the ones who relentlessly dedicates themselves to honing their craft, then the math above simply works.
This article is what you are striving for. It is possible, but it is reserved for those few put in the most work. I have published statements and provided proof in the past on this site. Even if you decided it was possible, you would still need to put in the thousands of hours it takes to reach the level discussed in the article. And very few people that have determination. Although their opinions may be useful for what not to do.
I feel it is important to tell people what is possible, otherwise the bar stays low. And in the financial industry it has been set VERY low. That is just not good enough for me, and so I found ways to improve on that. This goes for professional traders as well. All markets are good day trading markets. I personally prefer the forex market, but futures and stocks are also great. Realistic scenario, is that you will make no money for the first year or two.
I say this because you should not be even using real money for the first few years. The real issue is you need a mentor and coach. Finding that is uber difficult. Most teachers make their money from teaching because they failed at trading.
Any trader worth his weight in salt would not need a dime from a student. A good trader can pull money out of the market at will. A certain elite group.
The rest are schmucks. The proof is always in the pudding. Mind you I have been trading for 10 years. It only works until they blow up on a single trade or forget to set their stop loss one fateful day, especially when trading futures or forex on leverage. Thanks alot for this eye opening information on forex trading. This account gives you ECN technology without the add-on commission. Instead, commission is worked into the spread, which should make it easier to keep track of your trading performance.
MetaTrader 4 Minimum Deposit: For swing trading a bit bigger spread and no commission is fine. If you are looking to swing trade, the smaller the spread the better, but that should give you a good idea. If the broker is offering those types of spreads, it should be fine for swing trading. A tiny bit bigger is also ok, but if they are charging a much higher spread than those discussed above, you may want to consider another broker. What if you dont trade using leverage, is there enough profit to become a day trader?
The best way to find out is to practice in a demo and see and what your actual returns are like. Do this for at least a few months; trading the same way and the same amount you would trade in a real account. That will give you best idea of what your expected income could be from day trading. Many people struggle with day trading, so practicing and gaining consistency in a demo account before using real money is a worthwhile process anyway.
Thanks for the excellent advice, Cory. I also realize that volatility these days is low compared to what it was a few years ago. So I am really looking forward to reading your upcoming book and trying out a few of your recommended strategies — first in a practice account and then in a real money account. Is there any indicator that gives a precise idea of how much daily volatility there has been in the past week, month or year? Ardeshir, you can get a load of information, such as average daily volatility, average volatility by hour of day, average volatility by day of week, and historic volatility comparisons on the Forex Daily Stats page: Set it to 14, and when looking at a daily chart, that will give you the average price movement per day over the last 14 days.
You find on average though at the end of the month that losses are actually 12 pips and winning trades are 16 pips. You averaged 5 trades per day, so if you have 20 trading days in a month, you made trades. I should very much like to try it, since it looks so very promising.
In fact, I could afford ten times that much. I have been trading for over a year and half now, and although I am successful, I am less than one-twentieth as successful as you are saying I COULD be. Except 5 mini lots would be 50,, not 5, A mini is 10,, a micro lot is 1, See Position Sizing in Forex: As for your other question: Finding 5 trades a day, equivalent to the above, is tough in our current environment becoming less so, and there is always the option to trade multiple pairs or pair which just have a lot more volatility.
So when volatility is higher, consistently over pips per day then the above scenario becomes more realistic. Basically, when you look at 1 minute chart, you want to be able to see the price making runs of at least 20 pips before seeing a pullback, with some regularity either direction.
But this changes over time. Back in when pairs where moving or pips some days potential was higher than what I have laid out here. So expectations MUST change with volatility.
When a pair is moving pips a day there is theoretically twice the potential as when it is moving 75 pips per day currently, we are more toward the latter case. I will add a tidbit about that into the article. All this—adapting to volatility, only trading during certain hours, which pairs to trade, how much money to trade with, and the strategies to use—are all coming out in my new book. Should be available in the next few weeks on the website.
It turns out to be 1: It may seem that way, but actually no. How much a trade costs to put on, and how much is made are two different things. How Much Forex Leverage?: Where leverage matters is in your percentage return, not your absolute dollar return. But if you have a So you can buy multiple mini lots for 10, each. The leverage level just determines how much capital you need in your account to trade a certain position size. Does that make sense? Basically leverage determines how much you need in your account to take a trade…and is a separate issue from the actual dollar amount return of a trade.
Hi Cory I am a college student and i want to learn Forex.. I have written an ebook which covers the basics of forex trading and provides multiple day trading and swing trading strategies: Other than that, you can go through the Trading Tutorials page and read individual articles.
As for brokers, it will depend on where you are located and your trading style if you want the option of scalping then FXOpen is recommended , but here are a few to check out:. You can find more information on choosing a forex broker here: I used different account amounts to show that you can generally start trading forex and futures with less capital than would be required for day trading stocks.
Also, I used slightly different strategy examples for each market. To answer your question though, yes I believe there is more profit potential in the forex and futures markets than in the stock market. This is largely attributed to the use of leverage in the forex and futures markets which can magnify returns and losses. Hi I love your explanations I just have two questions: Therefore my first question is, is the forex market the most profitable if I plan eventually invest large sums of money?
I am a college student and as I career search I find myself especially attracted to investing so I want to know what market I should plan to invest in as an occupation for the rest of my life. The reason being that there are a number of ETFs you can trade commission free with Thinkorswim. There is a full list of commission free ETFs with select brokers available here: And the platform is pretty good for most traders purposes.
Depends on where you located and how you plan to trade. Interactive brokers is a very popular choice. So is thinkorswim TD Ameritrade , but Interactive Brokers is likely the better choice…especially if day trading when costs need to be kept low.
There are other brokers of course. To see what lots of people are saying about their brokers and how they rate them, a good source is: Hello Nice Website, I am a forex trader and I am looking to explore trading stocks, what are your reccomendations on what broker to use?
Which market you trade. Each market has different advantages. Stocks are generally the most capital-intensive asset class, so if you trade another asset class such as futures or forex you can generally start trading with less capital. How much money you start with.
How much time you put into your trading education. To create consistent day trading income—where you have a solid trading plan and are able to implement it— will likely take a year or more if you dedicate yourself to it full-time. How Much Money Can I Make As a Day Trader — Final Word All scenarios, and income potential, are assuming you are one of the few day traders who reaches this level and can make a living from the markets.
You May Also Like. Hi Cory I am from Canada and I read your blogs regularly since I started this full time well disciplined trading in May Could you please advise whether I am going in to the right direction. Any suggestion to improve? Here is my one year stat. Thanks and Happy Trading. Hi Chandrakant Jangam looks great , but what kind is your initial investment??? Total cash in investment account: There are a couple major problems that I see: Thanks once again all the Best Anil.
Thanks so much for your thoughts. Hi Cory, Thanks for a great and informative site. Thank in advance Michael. Thanks for the feedback. Hi Cory I purchased your book and find it very informative as for me trying to learn forex trading might as well be trying to learn another language! Hi Cory Thanks for the prompt response!
Hi Cory, information in high level here. Again, thanks a lot. Then there is the more traditional hedge fund structure. Hi there Great article. What is the max amount of contracts you can trade at one time on the futures market? Once again, genius remark. Cory, I agree that the good traders stay silent. This stuff is not fantasy…it just works with enough practice. Thanks, Look forward to transferring some of my skills in equities to futures using a gentle approach that starts in demo!
Hello Cory, Thanks alot for this eye opening information on forex trading. Is it ok; ecn. Yes, I understand now. If I am right, could I please ask you another question? Or am I wrong here? Hi Fabio, I have written an ebook which covers the basics of forex trading and provides multiple day trading and swing trading strategies: As for brokers, it will depend on where you are located and your trading style if you want the option of scalping then FXOpen is recommended , but here are a few to check out: Hi Steve, I used different account amounts to show that you can generally start trading forex and futures with less capital than would be required for day trading stocks.
Hi Hira, Please ask your questions here. That way everyone who reads the article can benefit. Is the level that if your margin level goes below, you will not be able to take any new positions. While having losing positions, your margin level goes down and becomes close to the margin call level. Is the level that if your margin level goes below, the system starts closing your losing positions. Then if your other losing positions keep on losing and the margin level goes below the stop out level again, the system closes another losing position which is the biggest open losing position.
I was surching for some helpfull material to understand term. I found that this artical is very helpful and easy to understand for me. Can you please let me know how to calculate this for a account currency is Euro. How can i calculate margin here ratio is Really there is lot of information and have easy way to understand. I think this is best where is lot of knowledge and better site.
I am currently trading with a broker who leverage 1: I also have tried to contact him many times but get no feedback, however I still receive daily reports from him. Lately he has lost a lot of trades which worries me. Your advice would be appreciated. What if I start a trade risking the whole account with balance equals equity equals margin right at the very beginning?
So no free margin available. This is a suicidal strategy for an idiot: And that is not to mention the false price spikes they cause to liquidate clients, stop hunting, and numerous other methods to steal your money, just like the lying Jews in the Temple, whom Jesus chased into the dirt. The situation right now, the buying position equal the selling position and my account is on Margin Call.
I need your advise what I should do? And how can I keep my account alive? Your prompt advise is appreciated, cause I have one weak to act otherwise my account will be wiped out. You mean you have hedged and you have taken a long and a short position of the same currency pair at the same time? Not Hedging, what happened the positions I had reached a losses nearly equal my balance, the system made new positions equal the opened ones which makes the Equity and free Margin almost zero instead of closing positions one by one as you said.
This is really strange, because how the system can take new positions while your losing position equals your account balance? There was no free margin in your account for taking any new position.
I think you have nothing to lose now if you hold your positions. If you close, you will lose all you have in your balance. However, if you hold, then chances are the price turns around and you get out of this trap. If the price keeps on going against you, then you will lose no more than your balance which is already lost indeed.
Can somebody tell me how to get the margin coverage with the information they give me? Which of the following is false? If the free margin is , The price is not the good one. All I have to say is thank you. Could you please explain what volume set to 0. Thanks for your wonderful guide. I feel that I came to correct path after know you in LuckScout. Hopefully to go long journey with your brilliant way. I have question, regarding Margin.
Like you said margin is based on leverage calculation. My balance is I am computing it but my computation gives me a margin of I am quite confuse how you do it. Hope you can help me out with this.
To have a 0. Oops my computation is still wrong, but still why is my account not reflecting the true computation.
Thank you so much Chris. To have just a 0. Hi Chris, Thanks for wonderful article. I have referred this article to many people who have just stepped in. Thank you Chris for that you are! My english is very low, so I need to translate all articles with google dictionary and with my knowlagde about english. Thank you for your knowledge and time.
I follow LuckScout everyday. Have a nice day Regards BeQuiet from Poland. Hey Chris, what usualy is bigger in a proffesional trader account, the balance or the equity? And last, how mt4 decide which trade to close in that case, thank you. I learned a lot now. I never imagined a profit which is much bigger more than double from the account balance. They are used to hold their positions for a long time and many of their positions go to profit a lot. Therefore, the profit is sometimes higher than the balance, but please note that it happens after a long time, not within a week or a few months.
Thank you for your lessons. But I confused about one thing. Let say I decide to open an account and choose to use 1: To make it simple, lets say I deposit and buy 0. Then my account will look like this: Also, my Equity will be equal to my Margin right from the start.
And, if the trade is floating minus, isnt it means that I can get stop out? This is really confusing. I hope I dont make you confuse and you get my point. When you get margin call, you will not be able to take any new positions, but your positions will not be closed.
Usually the stop out level is set in the way that your position will not be closed as long as you have money in your account. This is not true: Please explain this properly to retail speculators who know nothing about how MMs automatically liquidate positions in Metatrader from their initial trade. This is priceless , I did found it very difficult to understand Margin even insta failed to make me understand it.
Is it gonna be gone too or the broker will release it back to my account? Typically, I submit pending orders for two positions with the same lot size. On this occasion, however, I used a market order for my first position but when I went to open my second position, I found that my balance was already fully employed.
It was the only position open at the time, so there were no other open positions to take away from my available funds. Any advice you could give would be greatly appreciated, sir.
And I thank you ahead of time for your response. The principal reason you WILL get a margin call is the that the software you are using usually Metatrader is controlled and created by the Kosher Nostra in Russia.
Do not feel that this is unfair: Doing this should allow the majority of retail traders to buckle the entire Metatrader mafia and destroy it. Hi Chris, I have been searching for a formula to calculate Free margin that includes hedge trades.
I will surely apply my knowledge from this article while I am trading on my demo account ,and will get back to you if I got any question. With bigger leverage I require less margin and can make more trades. Leverage is not that important. It is only a problem for novice traders who take so many positions. I know experienced traders will never consider to switch to another trading platform but I recommend it for newcommers. For instance, you can set up a trade to take profits in steps.
Something that you posted somewhere that you do it manually. As we have learnt the minimum size to enter a trade is 10k units. Does it mean that I have to buy 10k units or do I pay with 10k units?
I mean like this: Therefore I choose 1: But can someone tell me weather consistently profitable traders use MT, or do I need to look elsewhere?
With prices like 1. But they become like 1. The most clear and clean explanation so far concerning the subject matter of. Hi Chris Thanks for the article. Hopefully you can help me. VERY good simple explanation specially i am no good for calculate i like the way calculate automatically….
Now i can use this website calculator Thank you author …. This eBook shows you the shortest way to acheive Financial Freedom: Just before you go, did you check This System? Make sure to do it now, otherwise you will regret. Article by LuckScout Team.
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