Using Futures With a New $5,000 Account

July 10, 2024

As great as Futures trading is, there is one problem.

You need money (i.e. big accounts).

To trade just one strategy on the E-Mini S&P (ES), you need almost $14,000.

If you want to hold overnight.

(If you daytrade, it’s only $1,228, and that’s very enticing).

So, if I was considering using the Performance Page Portfolio in a new account, I’d need at least $42,000.

Yikes.

This new account is only $5,000.

Starting out in stocks is so much easier, like we talked about in the last Newsletter. You can fit stocks into almost anything.

But all is not lost.

Futures recognized this problem so the Futures Guardians all got together and made it easier for the little people to trade.

They made micro contracts for us. For the ES, it’s called the MES, and it’s one-tenth as big.

In other words, we only need $1,400 to trade one MES contract.

Aha!

So, let’s see what that might look like.

In the Performance Page Portfolio, we have 3 ES strategies. If we convert those to MES, we’d need $4,200.

We made it.

And here’s the Report for those three strategies on MES. (You can get the details on those systems HERE.)

Not bad.

Here’s the Curve since 2001 on a $5k account with no compounding:

It’s good, but I would definitely do two things.

One, I would compound my gains annually.

Two, I would probably use more than one 1 contract on each trade. It’s rare that all of them are in a trade at once. I’d double my size and go for double the money.

That means I would risk missing a trade, and that’s not great. I’d seriously consider it, though.

Is there anything else I could consider for this new $5k account?

Yes, and we’ll talk about that in the next Newsletter.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.