Don’t forget! June (M) is front month for stock index futures like MES, NQ and others. ESM26
The following are suggestions on trading during FOMC days:
· Reduce trading size
· Be extra picky = no trade is better than a bad trade
· Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 6825.00 with a stop at 6815.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 6810.00 and place a stop a few points below in this hypothetical example (consider current volatility along with support and resistance levels).
· Expect the higher volatility during and right after the announcement
· Expect to see some “vacuum” (low volume, big zigzags) right before the number.
· Consider using automated stops and limits attached to your entry order as the market can move very fast at times.
· Know what the market was expecting, learn what came out and observe market reaction for clues
· Be patient and be disciplined
· If in doubt, stay out!!
I am sharing a very important question I had with a prospective client recently.
He asked me, “How many day trades are too many with a $10,000.00 account valuation?”.
This question is more important than most think as we see too many accounts that overtrade leading to a kind of Hari Kari in this industry.
There isn’t a fixed “too many,” but with a 10,000‑dollar futures account you should anchor everything to risk per trade and max daily loss, not trade count.
Start from RISK PER TRADE
That means your stop distance and contract size must be chosen so a full stop‑out costs no more than that amount; if you can’t get the stop that tight, you must drop size ( e.g., use micros)
Common guideline is risking about 0.5–1% of the account per trade when you’re still building consistency, so roughly 50-100 dollars per trade in a $10,000.00 account.
Define a Hard Daily Loss Limit
A Typical daily loss limit for a 10,000 dollar account is 2-3% of equity. roughly 2-300 dollars per day.
What that implies for “How Many” day trades.
If you risk 15 per trade and cap a daily loss at 3%, then 3 full trades is your daily limit: you’re done for the day if you’re wrong 3 times.
If you risk .5% per trade, that’s 4-6 trades before you hit your max loss of 2-3% per day even if you haven’t used all the slots!
Why “Too Many” is dangerous for a small account
As the number of intraday trades rises, you will tend to: overtrade marginal set-ups, pay more in commissions/fees, and increase the chance of revenge trading.
A reasonable starting point for a $10,000.00 account might be something like 2-5 trades per day and a rule you live by that you also stop if you exceed a certain number of consecutive losers.
What to discuss with me, myself and I
Discipline is essential to success. Plan your trades and trade your plans.
Tell your Broker
If you tell your broker what market(s) you’re trading and your typical risk per trade in ticks or points, he or she can translate this into a concrete max contract(s) and a sensible max contracts per day given the avg. volatility for the contracts you like to trade (they may even suggest different contracts that may be more suitable given your style and account size)
Don’t forget! June (M) is front month for stock index futures like MES, NQ and others. ESM26 |
