FAQ's - Questions Answered

Why should I consider managed futures?

With the advent of managed futures accounts and automated trading, the average individual investor can now use short term trading as an adjunct to traditional investing in stocks. The traditional rules to investing still apply; diversify your investments to limit your risk. In general, short term trading tends to work best when volatility is high, so it acts as a hedge against owning stocks and creates the chance to make money when the stock market is going down. Of course, you can do that by shorting stocks, but this puts you in the position of picking winners and losers among individual stocks, not an easy thing to do, not to mention the amount of work involved. If you are skeptical then just wait and watch.

Software Lease Fees for ES Systems

Software leasing is available through brokers who will auto-trade the system for you. Leasing is done on a monthly subscription through PayPal. Just click on the subscribe link on each system page. This will take you to a page where you will be able to select the desired level of trading. Next, click the PayPal subscribe button and you will be taken to the PayPal website where you will complete the subscription process. The first month is always free.

Subscription Availability

The subscriber based is growing steadily. At some point, subscriptions may have to limited, but it's not possible to say when this might happpen. It depends on how the number of contracts being traded affects slippage going forward.

When should I stop trading?

This is a question that everyone will face sooner or later. The answer is that you should follow the rules you established when you started trading. I will not make recommendations on when you should start or stop. The only recommendations given here are the minimum account size for trading a single contract. For the ES, one should not start with less than $15k and expect to see a 30% drawdown. In general you should look to whoever is advising you on trading in the first place to help make these decisions. This is most likely your broker or yourself. The one additional piece of advice I would offer is "don't stop and start." If you decide to stop trading, especially if it's due to a drawdown, then just stay stopped. Strange as it may seem, a common mistake investors make, especially ones who are trading for themselves, is to get in when things are going up and get out in a drawdown. This buy-high/sell-low strategy is a certain loser, but many people make this mistake. In system trading, it is much the same as stocks or anything else.