Newbies Only Part 3 by Trade Aptitude

When this blog was launched on July 29, 2021, the focus was on day trading the S&P Futures using a version of Volume Profile for strategy. Over time the content has broadened to include other strategies, stocks, options, swing trading, trade planning, and psychology. This new format should better reflect these changes. Thanks for reading and comments for improvement are always welcome.  

Newbies Only Part 3

Happy New Year! The next several blogs are part of a multi-part process to tune up your trading plan for the coming year. If you haven’t read the prior two posts, you can find them here.

Yesterday you chose a time horizon to trade within and created a “calendar” with times blocked out for your trading tasks, research, execution, and review. 

It’s time to decide how much starting capital you’re contributing to your new “business.” This should be risk capital, meaning money you can afford to lose both financially and psychologically. 

Don’t fool yourself with this decision. Make believe you’re writing a check to your favorite charity. You may get nothing back. 

I frequently hear the question “How much capital do I need to start trading?” Different styles and different trading vehicles will require different capitalizations. But that’s getting ahead of us. 

You can start trading with a few thousand dollars, maybe less, and any amount more. It’s not about the amount, it’s about how you would feel and react if you lost it all. 

Trading is more psychological than mathematical. If you start with money you cannot afford to lose, you’ll become emotional over every trade result. No good. You want to trade with confidence, not emotions. 

Before you get scared away by all this losing talk, know that before you ever trade with real money you’ll practice in a simulated account until you feel confident in your plan and skill level. 

Another good decision to make now is how much you’re willing to add to your account later. Let’s say you’re starting with $5000, and you experience a losing streak. Will you add any more risk capital to the account? How much? What about a winning streak? Will you add more capital then? Think about it. 

Tomorrow we’ll dive into the different markets to find your perfect fit.

Our trading teams focus on multiple strategies for day trading futures and high-probability candidates for swing trading options. You can try either or both risk-free. Join us.

To your trading success,

Mike Siewruk

PS: Feel free to forward this invitation to your trading buddies. Share in the wealth!