With the current instability and market uncertainty in equities, a lot of people have been
looking to commodity day trading for
their investment wants. Before you go-off commodity day trading, I have a few
helpful tips to relate to you that should be looked at in close detail.
1. Establish a
Well-Funded Account: This is one of the most unnoticed aspects of commodity
day trading. Studies in the past have shown the extra money you have on hand in
your trading account, the additional chance of success you will have.
Why is this? You need to have a well-funded account when
trading since you have to be able to have a margin for error. Not every trade
you make will be a success; you will have losers. In commodity day trading,
what matters are limiting your losses and letting the winners run.
2. DO NOT
Over-Leverage Your Account: A lot of people who want to start commodity daytrading will start to look into the rock-bottom margins they can get, especially
in the e-mini stock index. Some places may be able to give you day trading
margins as low as $400.00. It's fine to use this day trading margin, but DO NOT
overdo it.
If you are opening trading with a $4,000.00 account size and
are using a $400.00 day trading margin, do not look to use up each penny in
your account and trade 8 or 9 contracts at one time. This is suicide, and most probable,
your account will go into debit fairly soon.
As a common rule of thumb of using influence in trading, I
NEVER suggest using more than 20% of your account equity toward one trade, in
the case that would be two contracts at a time.
Money Market Manthan Financial Services
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