Wednesday, February 08, 2006

Trade 1 or 10 contracts

Just recently I followed a link advertising trading coaching. Well, one of the suggestions I saw there was, that you should not start trading without enough capital in your account. And the suggested size of the account was 100,000$ to pay for datafeed, losses, coaching service and other expenses, you will incur in your trading career from month to month. On the other hand they promised to teach you to make something between 500$ to 2,000$ a day.

  • Yes, it is true, that you can't make money without money
  • Yes, it is true, that you can't trade emotionless, if you stay with the back to a cliff and you know, that the next loss, the next trade might mean, that you are broke.
  • But, it is also true, that the easiest way in trading to end with a small fortune is to start with a big one.
  • And it is also true, that you will make the same mistakes, whether you trade 1 or 10 contracts, whether you trade 200 or 2000 shares.

Do you really think you can trade 10 contracts, if you can't trade 1 or 2 contracts successfully?

Somewhere I read, that you need to earn the right to trade more contracts. And that is exactly true. Increase size, if you can successfully trade 1 contract, if your account has grown from 3,000$ to 6,000$. A simple calculation tells you, that this 100% increase in your account is "just" 20 days or one trading month away, if you make net 150$ profit a day.

Globetrader_207

150$ is sure something you can make trading 1 contract only and to restrain yourself from trading more until you know you can trade just makes sure you will survive the learning curve and not end as one of the cast aways.

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