I Tried Day Trading With $1,000

i have one thousand dollars and i wanna trade my way to five thousand dollars the question is can i do it by day trading futures without any experience and more importantly can you well let's find out so what are futures well apart from being jimmy world's best album the futures market is where you can buy and sell contracts for commodity or security so for commodities you have grains gold oil etc for securities the most popular ones to trade on the futures market are the s p 500 futures the nasdaq and the dow now with features there are a few key things that interest me for one it's leveraged meaning you borrow money from your broker and this magnifies small price movements into big profits or losses for instance if you're using ten to one leverage a five percent price movement would result in a fifty percent change in your investment two the futures market runs about 24 hours a day so you can trade just about any time three futures contracts don't suffer from time decay with options the closer you get to expiration the more it loses in value not with features four there is no pattern day trading rule with futures with stocks and options you can only make three round-trip day trades if you have an account with less than 25 000 in it this can be tough for people who are just starting out and want to day trade but futures contracts are not subject to this rule so if you want to trade futures you need a few things the first being an education i'm actually going to brush over that step because this video is merely for your entertainment and i have no idea what i'm actually doing remember i am not a financial professional i'll give a brief overview of features and how you can make money trading them but the main part of this video is going to focus on the actual trading of features but the second thing you need is a futures broker i already have a brokerage account with td ameritrade and while you can trade futures on it it's really not optimized for it so i decided to find a brokerage that was really geared toward futures and i went with trade of eight now for the most part you will encounter commission fees when trading futures or some sort of other fee so compare the different brokerages their platform and their benefits before deciding on one so i went ahead and deposited one thousand dollars into my new trader bait account and then waited five business days for the funds to clear while waiting i try to learn as much as i could about futures trading by reading articles and watching youtube videos but like with most things i really just want to dive in and actually do it to help me learn it and just a reminder with all types of trading i recommend you use demo account and paper trade until you have a good feeling a good grasp on how to actually do it before jumping in with real money but in my opinion that doesn't make for a fun youtube video so i'm gonna put real money down now with features your broker is going to want you to have a certain amount of money in your account in order to trade certain contracts and you can usually find that on your broker's website usually on a page called margin requirements for mine if you want to trade es which is the e-mini s p 500 the most popular futures contract you need to have at least 500 in your account if you want to hold it overnight which is riskier you're gonna need at least one thousand dollars in your account so to see how quickly money can be gained or lost trading futures let's take a look at the e-mini s p 500 with features one point is comprised of smaller units of measurement called ticks which is the price movement to the right of the decimal point for the s p e mini one tick is .25 which means there are four ticks in one point the value of each tick will vary based on the underlying so if you're trading something like gold or oil those tick values will be different back to the s p e mini each tick has a value of twelve dollars and fifty cents now since there are four ticks in a point four times twelve fifty equals fifty dollars so one point move represents a fifty dollar change now if you have a small account you may not wanna trade something that can impact the balance of your account so greatly and for that there are micro e-mini features which are more affordable these micro contracts are one-tenth the size of the standard e-mini futures so these are well suited for smaller accounts that still want a piece of the futures action these contracts will have an m in front of the ticker so if you remember es is the s p e mini m e s would be the micro s p e mini just so that we're all on the same page i'll quickly cover the very basics of a day trade if i embarrass on an index that i'm trading meaning i think the price will go down to enter the trade i will sell a contract and then to close the trade i will buy the contract now on the flip side if i'm bullish on an index meaning i think the price will go up to enter the trade i will buy the contract then to close the trade i will sell the contract make sense generally when trading futures you want to have levels set when you enter a trade that will exit the trade automatically when it goes in either direction so if you enter a trade by buying and you want the price to go up you want to be able to sell automatically once it hits a certain price target and conversely if the trade starts going against you you want to be able to exit the trade automatically before you lose too much money these levels are called your take profit and your stop loss when you enter trade with these levels already set automatically it's called a bracket trade if your take profit level hits it'll automatically close the trade and then cancel your stop loss order and the inverse is also true so if a trade starts moving against you and it hits your stop loss mark then it will close the trade for you and automatically cancel your take profit order you can also set these levels manually or adjust them when you're in a trade my goal starting out is to trade the first few hours of the new york session of the stock market which here in california the market opens at 6 30 in the morning i want to trade when there's a lot of volume so i can make quick trades based on price action so i'm gonna start trading tomorrow morning with one thousand dollars and i'll check back with you then [Music] so today was my first day trading futures on trade of eight i traded very sloppily today without much structure or discipline and it took me a while to get my settings right and just kind of get used to operating on this platform i started with micro nasdaq lots which is mnq my first trade was 11 minutes after the market open selling to contracts i didn't have my brackets set up correctly so it actually closed out of the trade one second later for a profit of two dollars real quick i forgot to mention if you want to see my profit and loss throughout the day just look in the bottom left hand corner of the screen recording and it'll show you [Music] i tried again with another two contracts and it closed out four seconds later for a profit of twelve dollars accidental profit then i actually decided to step away from the micros and went straight to the minis which remember are ten times the value there's a good amount of volatility today which made it pretty easy to get in and out with some quick scout plays watch this trade here with the nasdaq features in real time so you can see how quickly my trade changes value just look to the left of the join bid button to see the value of my open trade [Music] so i made just over 120 in 20 seconds it's certainly quite the adrenaline rush to see those big numbers move so fast and it's fun when you're profitable but when you start seeing red then it becomes a lot harder to stay disciplined now near the end of the new york session i made some trades that i definitely shouldn't have this shows both my lack of experience and discipline and as a result i gave back some of my gains luckily right before the end of the new york session i made a few quick moves to regain some of my losses i ended up finishing today with a gross profit of 664 but since i over traded i paid about 114 in commissions resulting in a final net profit of 549.99 my average trade time was just 53 seconds so you can see how quickly small moves makes a big difference in total i had 1 668 dollars in profitable plays but i had 1 000 in losing trades so if i can develop more of a strategy and stay disciplined i think futures may become one of my favorite ways to trade now the trades i made today were just manually entered and exited and so tonight i'm going to try to set up brackets so that i can systematically take profits and have my stop losses set before i enter a trade overall as a great first day of trading features i can't complain with a 55 return on my money so i'm looking forward to trying again tomorrow so today started off a little wonky because yet again my brackets weren't really set up right so it took a little bit of time adjusting them to get them roughly where i wanted them after a little morning selloff we had a nice uptrend on the nasdaq and at around 6 53 in the morning i entered a buy order just less than a minute later i closed out for 163 dollar profit after commissions within the first hour i had over one thousand dollars in gross profit and about 993 after fees and commissions so the morning went so well that i decided to call it quits before i could make any mistakes and so my account started at just one thousand dollars yesterday morning and is now at two thousand five hundred forty three dollars and six cents i still feel like i'm just getting lucky so we'll have to see if i can maintain this over a longer period of time it's been over a week since my last update so let me catch you up on this day trading challenge on wednesday december 23rd it was a pretty choppy day in the market as most wednesdays tend to be i knew this and yet i continued to force trades which i shouldn't have after a series of bad trades i was sitting at a gross profit of 165 dollars but with 28 trades commissions and fees ended up eating up over half of my profit i decided to switch my trade of 8 subscription plan over to their commission free model which is 350 per month but with the amount of trades i've been doing i should end up saving some money [Music] i ended up making a few more trades and by the end of the trading session i was up a total of seventy dollars in profit day four christmas eve on christmas eve the market was open half a day and i wasn't planning on trading much i was up about 235 on the day and then i was on a zoom call with some family and i accidentally entered a trade and it wiped out all my profits and then some it put me in the hole for 320 for the day that was an expensive zoom call so that wrapped up my first week of trading let's go to the next on sunday the futures markets open at 6 pm eastern so i decided to log in in the afternoon and look for some trades [Music] after a couple of hours i locked in almost 450 in profit to start off the week monday was another good day of trading trade event includes sunday on my mondays profit and loss so with both days combined i netted about 800 which brought my account to over three thousand dollars now here's where things took a turn on tuesday i suffered some pretty big losses and it put me in the hole 380 for the day but i was able to chip my way back eventually netting about 642 dollars in profit within a little over an hour of the new york session open now here is where i should have called a day and gone back to bed but i didn't i thought i would try to lock in some points right before market close where there is usually a lot of volume unfortunately things didn't go as planned and i gave back all of my profit and then some i ended up finishing the day in the whole 356 dollars and feeling like a total idiot if i thought tuesday went poorly wednesday went even worse i was in the hole all day with practically every trade going against me my losing trades were massive losers and my profitable trades were small potatoes i ended up losing over two thousand dollars on wednesday which was a huge blow to my account and also my confidence as pissed as i was and honestly still am to lose that much money especially after a week of good trading i do think it was honestly for the best for that to happen in this video because i think that is the most realistic outcome people can expect when doing these quick scalps on the nasdaq without much experience the nasdaq moves fast and is pretty volatile compared to the s p i don't want you to think that you can just do what i did and make a couple thousand dollars that easily because um well you can see what happened i declare bank this showcased my lack of discipline and a solid strategy which is an easy way to lose a lot of money well i wish i could tell you that thursday was when i got things back on track and really turned things around for this challenge but that's not the case i dug myself further in the hole by losing 392 dollars it just felt like every single trade went the opposite direction so if you inverse all my plays you probably would have made a decent amount of money my account is now 70 381.70 so i'm very close to blowing this account for the entire challenge the market is closed for the rest of the week due to new year's so i'm going to take a much needed break from losing money and i'll come back next week and we'll see what happens unfortunately the bleeding continued sunday afternoon i couldn't recover monday either so now my account is below 50 which is the minimum you need to trade a micro contract so this challenge has been a spectacular failure but at least you know now what not to do here's the thing though i actually really enjoyed trading futures and so i think i'm going to continue to do so moving forward but i'm going to try to develop a more reliable trading strategy i think relying on strong supply and demand levels for my entries and exits instead of doing these quick momentum scalps will be more profitable in the long term also i don't think i should have jumped into those e-mini contracts so quickly with such a small account especially the nasdaq which moves very fast i'd like to build my account up to like ten thousand dollars before trading those minis and instead stick with the micros so that way my account has a little bit of breathing room so while i am personally disappointed that i lost money i am glad that you got to see me fail because i don't want you to have unrealistic expectations going into any type of trading but especially futures the way i was trading it was gonna be a get rich or get wrecked and obviously i got wrecked i also decided to take my own advice and do some trading on a demo account so it's just a few simple trades i needed 468 dollars on my 1 000 demo account if i do get good at trading features i will make another video about it and share with you my strategy since i do feel like a failure do me a solid and hit that thumbs up button on this video consider subscribing if you haven't already and i'll see the next one [Music] bye you

Channel: Daniel Inskeep

Views: 1,194,378

Rating: 4.9501958 out of 5

Keywords: personal finance, daniel inskeep, making money online, stock options, robinhood, trading stocks, tradovate, futures, day trading, futures trading, day trading with less than 25k, trading challenge, day trading for beginners, day trading strategies, day trading 101, stock market, small account challenge, learn to trade, make money online

Id: QMK70LE4-AY

Length: 14min 31sec (871 seconds)

Published: Fri Jan 08 2021