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Getting Started Trading with 1,000.00 Using Ninja Trader
I'm definitely no advocate for sim trading. However if you're a complete newbie with no background in trading, you're going to have little understanding of anything. A newbie might not even understand how order execution works, what type of orders should be placed, or why certain orders are filled/not filled. I've seen newbie traders jump straight into live trading to make pointless execution errors, simply because they lack a basic understanding of platform functionality, eg how to place/amend/cancel orders. These traders then proceed to quickly blow up their 1k accounts and think it's the brokers/platforms providers fault because they didn't get stopped/ filled etc etc. This is very typical with CFDs/FX where brokers suck in newbie traders offering low margin on micro sized accounts.
So I think it's stupid for a complete newbie( with a 1k account) to jump straight into any form of live trading when they don't even understand the functionality of their platform, it's just asking for trouble. You're much better off getting comfortable in sim first, and at least familiarizing yourself with how everything works.
"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
Can you help answer these questions from other members on NexusFi?
You've chosen quite a difficult road to travel. You've received what can be regarded as quite a lot of negative feedback - however it is well meant. You have no margin for error with the small account and will need an insane amount of luck to not blow up.
If you wish to grow your account, then I would suggest some serious reading before you start. William O'Neil wrote a book called How To Make Money in Stocks (https://www.amazon.com/How-Make-Money-Stocks-Winning/dp/0071614133/ref=sr_1_1?s=books&ie=UTF8&qid=1438153272&sr=1-1&keywords=how+to+make+money+in+stocks). I know this does not relate to futures, but bear with me.
David Ryan won the US Investing Championship all 3 times that he entered with triple digit returns in the 80s. David Ryan is a classic CANSLIM-trader and was O'Neil's number 2 for a number of years.
Mark Minervini won the US Investing Championship in 1997 and would have won in 1996 had the regulator not intervened. He developed his own method, but there are many similarities between his approach and David Ryan's - not surprising since he attended an IBD workshop presented by David Ryan and still lists him as a big influence in his trading.
Dan Zanger has the highest annual returns of any trader I know of - the number one book he recommended is of course O'Neil's.
Now, how does this apply to a small account:
1. You need to acknowledge that the most efficient way of growing a small account is through capital additions - you need to get a plan of depositing money monthly into the account.
2. The CANSLIM approach works best when markets come out of a big correction / crash. With your limited capital you don't want to pay excessive commission and just get chopped around. You may need to wait until the market has gone down significantly and no one wants to touch equities.
3. You need to keep your trading to a minimum and grab a stock that doubles, triples, quadruples, etc. Coming out of 2009, there are several stocks that have gone up 10 times or more. You really want to get hold of one of these. Right now the market won't provide you with too many of these opportunities. With $1k you are really only interested in owning 1 stock. O'Neil provides a handy guide of how many stocks to own depending on one's capital in his book.
4. You need to stay off margin - you need to have a stop that gives a stock room to move, but also can't afford to have losses do too much damage to your account. Primary focus should be on limiting losses to your account.
All of the above books are a fairly small price to pay to get a very decent education about trading. Since you have a long term plan, spending some more time reading / developing a plan may be time well spent.
But still, he needs to be doing something. He needs to gain proficiency with use of his tools and sim is good for that. Yes, it's naive to think that he's not going to loose the sum of his account but he really needs to spend a good time getting the feel of the market.
I've traded before and was good at it. (Then listened to dumb people and went to college and had real jobs). Now getting back into it... The platforms changed, market factors changed, participants changed. Have to experience those and practice. More quant, more psychology, more electronic trading, but less greenhorns, they used to herd them in in significantly higher quantities in 90's and early to mid 2000's.
And to Mike's point that no one can learn... well, it really is only partially true (Let me put on my Mathematics Professor hat). People can learn even if something is not natural for them, it just takes a heck of a lot of time and it can seem borderline futile ( take this, apply to trading). If you do not experience, you will not know if you even have it. Besides whatever you are looking to trade, there is a whole big world of publicly traded securities and you should find ways to experience them in action at minimum risk. If you have it but you can only understand stocks, god bless you, then tinker in that and see if you can find a system that works for you. (For example: I am good at picking stocks but suck at exit strategy on those, plus they are too shady for my liking to bother to understand them on a more intimate level. So I stay away from them. Like I can do currency arbitration through transfer between banks but can't trade Forex. I hedged options contracts of ETF's of Indexes for 5 years, for some reason those make sense to me. I did secularization for a couple of years, that end makes sense, and structuring and trading REITs make sense to me. But you will never see me trading commodities.) Figure out what you can wrap your head around! Don't try to beat it in!
I completely agree that you should not force yourself in a square space if you are a round peg, it will just cause you more pain and distress. But you don't know unless you try, and learn more along the way. But know when to fold up and walk away. There's an ish load of mental seasoning involved and if you come in with an entitled attitude that you will not loose it all, you already lost (I take it you were raised in the states, some kind of sheltered middle class upbringing). Come in with an attitude: "I know nothing, let me take X number of years of sustained dedicated effort to learn as much as I can from people that have been at this for ages and are willing to teach me the ropes." Think of yourself as an apprentice, you can't be a master until you put in the time and effort to get good at your trade.
It's not a side gig. You need to dedicate yourself to it. So find a way to dedicate yourself to the learning and understanding and tinkering with it. (I am in the process of getting back into trading, but also in the process of retiring and moving from the States to Colombia. Takes a second to line up those dang ducks. Could not half a$s/part time it, so I stopped trying to squeeze in trading. Taking care of stuff now so I can get back to full timing at trading when I settle down in October.) You need to find the dedicated time with good brainpower to actually succeed at this, 10 pm on a Friday or when you are in your truck at the yard between loads, are not good times to try to do this.
Came across Ninja Trader over a year ago when I was unemployed. SIM Traded ES and CL and was able to watch daily/hourly market volatility. I did very well in SIM mode. Have also invested/managed a 401K that I did very well choosing and researching funds to invest in. Seen the crash in 2008 and my retirement was hit hard.
Divorce put a ruin to my retirement account/and a successful eCommerce business.
Have achieved success in the past and will achieve it again. Not here to gamble but invest and learn. I do not need any income out of this so whatever is made stays in the account. Yes ultimate goal is to trade full time. Stated my plan is conservative, so this may take me years to achieve.
Want to say thanks to the handful of folks that posted positive/good information. It was read, printed and on my desk for further review. Please continue to post good information for ALL users of this site to learn from.
Facebook is a great place to make jokes or negative comments! Anyone can be a big shot behind a computer screen...When I read comments like some the above, I just assume its an 8 year old child playing with daddys computer.
Have to sign off for the day, and provide a needed service to our country.
What is generally overlooked with regard to simtrading is that it is the sixth step in a seven-step process. If one doesn't go through the steps leading up to it, then it is unlikely that he will get much out of it more than developing bad habits.
On the other hand, if one is going to do no more than throw money at the market without having the least idea how it works, he would get more enjoyment out of his money by setting it on fire.
I don't have an issue with sim trading for a week (5 days max) to understand how your platform works. You should research what orders are before that.
My issue is with people that think sim trading for weeks, months, years is a good idea. It's a terrible idea in my opinion. People say "I'll sim and try this method". No, you research and test to prove a method. Using sim is like using a crutch, if you walk with a crutch for a long time you forget how to walk normally, and you develop a reliance on using the crutch.
Only with trading, it's a million times worse because of all the psychological issues.
You would be far better off taking a $50 swing trade to learn from, instead of creating all kinds of terrible behavioral problems with sim. No one said risk everything. Risk a tiny amount, but at least risk something.
I traded Equities for about 10 years, not counting experimenting with it through late teens and early adulthood. Mid-last year I started looking at futures. I immediately read everything I could, SIM traded multiple free trials and data feeds for a few months. Thought I was THE MAN because I was making like $30k a day in sim, sometimes trading up to 50 contracts... OBVIOUSLY not realizing that is VERY unrealistic. Then decided to go live, just $1000 with NT Brokerage and the free platform... Sales guy said YES! anybody can be successful just play it conservatively and keep your stops tight.
Here's the reality, 1 ES contract trades for $500 Margin and with a $1k balance that means you've got $500 losses before your basically busted. The NT sales guys are talking like a 4 tick profit target with a 1 tick stop limit. You're basically going to be scalping for $50 gross profits until you get your balance up to something reasonable. The point is with a $1k balance you will be forced out of trades, either by margin call or end of session (you cannot hold over night on a$500 margin).
Can you do it? yes. Will you succeed? That depends on your definition of succeed...
Here's the end of my story. I blew through my $1000 account in like a week of trading with a 4 tick stop that I moved up with every 4 ticks of profit. I put in another $1000 and this time only traded sim. I set the sim so that my orders only filled if they traded through, I had a $1000 balance (not the default $100k) and I input the commissions. Any time I lost more than $300 I considered my sim account blown and reset it. Trying to make it as real as possible. This didn't really work at first. Then I discovered BM forums, and read as much as I could while simply watching the market in NT, I only traded live 1x per month to recoup my fees and prevent inactivity. I figured I either made $25 or lost $25 and so it was the same as the inactivity fee +/-, newsflash I've never lost on my 1 trade per month. but that's random luck. Recently I've added $30k to my account and begun to trade live only one day a week limiting myself to 3 trades of 1 contract size and realized SIM is not real. The psychology of having your actual money in the market will mess with you bad! I've made some VERY bad moves that turned out profitable, think about that- positive reinforcement of bad behavior... That's frightening. I've also made some very good moves that turned out unprofitable, that's devastating! I'm treading water, and expect to continue to learn and improve my psych and trading skills.
1) Everything @Big Mike & @tigertrader say is truth, but don't take it ALL literally (you are marginally better off losing the $1k to the market and coming back lesson learned than blowing it on lotto, crack and whores...) This forum and it's members will scourge you but you will learn if you allow it/them to be your teacher. If you cannot handle the criticism from this forum then you cannot handle trading futures.
2) I gained great insight and self growth both in my trading and my life from Adam H. Grimes webinar (here on the forum), blog and free video course. You can spend hundreds or even thousands of dollars on books, systems, trading rooms and mentors without gaining anything useful. Adam's content is more or less free if you want it to be, and in my opinion will give you more in trading skill and personal growth than either experience or paid content. I would not trade live until you've completed his course and DONE THE HOMEWORK!
That's my plug. Good luck trading/learning. When (not if) you blow that first account up, record how it happened here in the journal. You'll get raked over the coals for it, but you'll learn. Then start over and keep journaling, sooner or later you'll get it, or give up.
I didn't say no one can learn, but that you have to be realistic. It's not realistic for a short person to want to be in the NBA. It's not realistic for a person without arms to play golf.
Likewise, it's not realistic for a person with no money to be a good trader.
Knowing the probability and statistics of your system is a paramount aspect of trading psychology. You should know the numbers for your system, either by sim trading or live trading, but you will need it. How can you think in probabilities if you do not know the probability of your trading system ?. IF a person doesnt have the psychology and discipline to follow a plan, he will pick up bad habits, whether it is SIM or LIVE.
Truth of the matter is, vast majority of traders fail because they jump in without a plan. A bigger majority doesnt even keep a journal, which is vital for learning from mistakes and fixing bad habits. Freedom is a curse in the case of trading, unless one knows how to manage oneself.
