Capital necessary to start futures trading?
I'm looking start trading on my own to get some experience and was looking to open a futures trading account. I've done the research in terms of learning technicals and fundamentals and have made many forecasts that have been accurate.
I was just wondering how much money you guys think I should have in order to start trading commodities futures, i.e. copper, wheat, oil. Do I need huge amounts of cash to purchase contracts, i.e. copper contracts are for 25,000lbs @ ~3.50/lb = 87,500? Or I just need money to cover daily fluctuations? These are probably really ignorant question, I know, but any information would help greatly.
well for equities the general concencius here is $2,500 I "trade" stock more like swing trade but anyway i would recemend getting a very good cell phone like the blackberry torch or iphone with 3g if you are a college student just because you can monitor positions at any time and close them when breaking news causes shit to dive 5%
You can trade on the margin. There is an initial margin and than a maintenance margin you must cover if the contract you are trading performs poorly. This is a simplified definition, I wouldn't trade futures on the margin until you fully understand the concept
If you are doing this to gain experience why not just try a papermoney account on thinkorswim or something. 2500 isnt a lot of money, but its better to practice before you play.
I thought conventional wisdom was that trading with your own money was a much better teacher than a practice account.
agreed. i'd like to just jump right into things and practice with emotions invested not just cash.
anyway, my main question is whether or not i'd need massive amounts of money to be able to take delivery?
how does trading on margin work exactly?
That's probably true but what is more valuable experience (This isn't rhetorical I'm actually asking) to trade on 2500 of your own cash or 100k of fake cash? Seems like you're massively limited with only 2500 bucks
op you should start off with equities then make your way to derivatives/equity
in everything that i've read, it's seemed like trading with your own money seems to be the best choice since learning to control your emotions is key to becoming a good trader.
i have no interest in equities. i'd prefer to just jump right into commodities since it's less information to process, i.e. no dealing with management, no forecasting company performance and seeing how they'll fit into the market later on with new developments or lack thereof, no law suits to have to worry about, etc. there's much less of the human aspect in commodities as it's supply and demand at its roots.
Margin requirements are to high. You would need to have at least 50K to start with futures.You can do FX future mini's that have much smaller margin requirements.
Have you ever traded futures? At some brokers it takes 2k to open an account and the initial margin amount to trade the 2Y T-notes futures is less than $300.
Unless you're dealing with minis, the margin requirements are going to be quite high for you likely. Go to any futures exchange, select products, then select a contract and check the margin requirements. Initial is what you post when the trade commences, and from there would be variance/intraday margin to account for changes in value, etc.
Hey there. Go through this page: http://www.wallstreetoasis.com/forums/college-student-interested-in-lea… Might be useful (Thanks Bondarb)
Commodities typically trade in pretty big contracts. You can get access to them via a number of ETNs and ETFs, though.
Additionally, with less than a $25K deposit into a trading account, you're not allowed to day trade on a regular basis.
When I was your age, I made short-term strategic investments in commodities producers- this was back in the day before commodity ETFs existed. I'd hold positions for about two or three weeks. You can get by on that with a $1500 account at Scottrade or Fidelity.
You can only make 3 day trades on a rolling 5 day basis when trading stocks and options. However, futures and forex are not bound by this rule. I trade bond futures on an intra-day basis and it wso/">suits me quite well. If you have a small account and want to trade futures, most brokers initial margin amounts are going to be high. My broker, though, has very low initial margin rates, which can be a good or bad thing depending on your trading experience. If your interested, just shoot me a pm.
With all due respect, that you are asking this question says that trading futures is the last thing you should be doing with your or anyone else's money...
No, 2Y T-Note future initial margin is 810 and maintenance is 600.
It's different for some brokers. http://mbtrading.com/commissions.aspx?page=Futures
It's different for some brokers. http://mbtrading.com/commissions.aspx?page=Futures[/quote]
That's only if you close out during the day, you can't hold overnight. See the overnight margin as 810? These types of margins are stipulated by the exchange, not the brokerages.
If you are trying to scalp minis intraday on the minimum margin, you're retarded and wasting your time and money, hence making it worthless to even worry about this.
I'm not talking about buying and holding in the investing sense, but unless you are just purely scalping intraday (which you'll likely get killed) trading does not mean being flat EOD. There is no sort of requirement for it to be defined as trading.
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