In futures trading the only contract I think I can trade will be the corn mini, because it has a small contract size (1000 bushels * $5=$5000), but it’s not very liquid. What other liquid contracts can I trade which have a contract size between $5000 and $10,000?
In stocks which broker do u recommend, etrade or optionxpress? Will they allow me to trade on margin both going long and short?
Also, where do u get ur data from? esignal seems to have eod package for $295, but I don’t know whether it is metastock compatiable?
15 Responses to “I Have About $10,000 To Invest, Should I Trade Only In Stocks To Begin With, Or Should I Try Futures Trading?”
Futures is a very quick way to loose all 10k. I know from experience. If you open an account with Interactive Brokers, you can trade stocks, futures, and even foreign stocks and Forex too. But I personally do not recommend that you attempt that.
Margin requirements for commodities. You are mistaken on what it takes to trade commodities futures. You have to put up only the initial margin per contract. For example Corn futures–a very hot commodity currently–requires only $1350 margin. Soy beans requires about the most $3000. You are certainly correct when it comes to oil futures though. The margin requirement is much higher. About $7100. Forex margins are about 2%
Here is a link where you can learn about all of this and about Interactive Brokers. http://individuals.interactivebrokers.co…
I do need to tell you that I am a stock holder in Interactive Brokers.
In futures the standard size of a corn contract is 5000 bushels, which means that with every penny that it moves the position could gain or lose of fifty dollars. The Margin to trade a standard contract is around 1080, with a maintenance of 800 dollars (margin fluctuates; it is a percentage of the value of the contract). Mini-Corn has a margin requirement of 216 with a maintenance of 160 dollars. With futures you can trade long or short. There are firms that provide their customers with electronic trading platforms with real time streaming quotes, charts and indicators and the data is free. There is risk in trading and only risk capital should be used. If you are interested in learning more then feel free to contact me.
This is nuts. You’re going to lose your shirt. You obviously haven’t read one book on investing. I don’t say this to be mean…… consider this a wake up all.
Looking for a broker is the last thing you do. Choosing futures before stocks is incredibly amateurish. Trading futures with a balance less than $25,000 is an immediate death wish. Day Trading stocks (same stock, four times a week) with less than $25,000 is against SEC rules.
I haven’t even touched the dangers of “drawdown”.
You need to also understand position sizing, Risk/Reward and Money Management. You’re at least a year away from actually trading.
Consider yourself warned.
In theory, its like 1/3 for stock market, 1/3 for bonds or security, 1/3 in the bank.
Futures are an extremely risky sort of investment. Trading on margin should also be avoided. While the potential for gain is high, the price of the margined stock may go down. If it does, you will be sold out, but you will still owe the funds that were borrowed to purchase the stock.
You are going to lose your money quickly in futures. It is about equivelant to rolling the dice.
Why not be conservative with your money. A fool and his money are soon parted.
Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan.
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Don’t confuse investing with trading.
If you’re a beginner and still want to speculate I suggest that you put about 9000 of your savings in funds and bonds, maybe a little commodities (ETFs). Trading futures requires much knowledge and money. 10000 would be a minimum to start if yu know the market. If you want to play the market, after you invested 9000$ in prudent investments you can get for the rest some options, trade a little FOREX with leverage (Northfinance is my favorite – good TA-client) and maybe some pennystocks. Most certainly you will lose your 1000$ in speculative trading but you will hopefully learn from your mistakes and maybe make up the 10% loss of your 10000 by profits in your investment.
So don’t trade too much unless you’re a pro. And you don’t need to pay for data or signals as a beginner. My philosophy about signals is that if they sell them to you, they are afraid to trade on their own.
I had the same problem as you have.
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I´ve been investing for more than 20 years and trading for almost 14, and I can tell you that if you want to make BIG and FAST profits, I recommend you trading rather than investing, trading can help you to go from rags to rich.
If you are investing, you must have already achieved some degree of financial success, long term stock investing and FOREX can help you become much richer than you are today.
My experiences as a Nasdaq Market Maker, Head trader of seveal brokerage firms, and currently as a professional trader and private hedge fund manager, I can sugest you that:
We trade because we want quick, short term profits on a consistent basis. We want to cash flow the market. Milk it like a cow.
Make consistent, small, short term gains rather than trying to hit a home run on every trade. Don’t ever forget that.
Don’t marry a stock, marry the idea of making money trading stocks. That’s the only way to do it.
For me “All stocks are equally worthless”
I don’t hold on to any illusion that the stock market will continue to go up and provide a nice retirement for me.
I could care less which way the market goes. It’s irrelevant to me if the market goes higher, crashes or moves sideways for the next 50 years. I really could care less. Stocks are just four letters with two prices next to them that I use to make a living trading.
Trade ONLY when you have a clear, easy and identifiable advantage, because without a CLEAR EDGE your odds of success are NO better than a flip of a coin… That´s why so many new traders (and investors) lose money.
Take a look at any daily chart of any index or stock and you’ll probably see the most volatility and the biggest opportunity for profit during the first Hour of the stock market’s opening.
The popular thinking and conventional wisdom is that you should wait about an hour before you start trading.
But if you do, you’ll miss the big, fast moves that stocks make as all the amateurs let their emotions out through their online accounts, usually right after they read some news headline or hear Maria Bartiromo go off about a stock on CNBC.
It’s easy to see why trading the open is the market’s prime time for profiting from other online traders.
The market’s open is very volatile – that is the perfect environment for LARGE, FAST profits.
Learn to trade as a professional Market Maker ,not as an emotionally driven amateur trader or investor with few thousand dollars in an account at Etrade.
There isn’t any other time during the day or any stock you can invest in, that can make you 1, 2, 3, 5, 7 or more points in minutes OTHER than during the first hour the stock market is open. That’s why I love trading the open so much.
I trade only when I have an edge and that means “only the fisrt hour the market is open”.
If you are a beginning trader, you can give yourself an unfair advantage in the market trading this way.
I can continue giving you a lot of advises about how to make money trading, but if you ask me:
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I’ve heard that commodities are the way to go, so I would say stay away from the stock market. That’s the short answer.
Stay away from futures. It is way to easy to lose money.
Good luck.
Etrade’s TTTrader platform is easier to use. Optionsxpress makes you jump through a bunch of hoops to enter and exit your trades.
Both give you margin going long and short. Etrade seems to be more flexible but I could be wrong I haven’t bothered to sit down and compare.
Yes the exchanges post their margin requirements but you’ll find different brokers have different degrees of “flexibility” on this.
You can trade crude oil, mini S&P, almost anything with a $10k account. Although with some there are higher requirements so you might not get too far.
Everyone has their own opinion about Futures. Some say it’s more risky than stocks. Others say it’s just speculating not investing.
Trading is trading, man. It’s all the same degree of risk. You can do a bunch of bad trades in futures and get wiped out in two days. Or you can do a bunch of bad trades in stocks and get wiped out in two months.
Preparation and understanding is the key. Read this first:
http://commonsensetrading. googlepages. com