I Tried Day Trading w/ $1,000 AGAIN
In this video, I load up my Tradovate account w/ $1,000 and trade micro futures contracts for 5 weeks! It was a doozy.
It’s been 10 months since my first video on day trading with $1,000 and well, it’s time to do it again.
First, let’s do some housekeeping. If you haven’t watched my first attempt, you can see it here, but it is my most-viewed video on my channel, so I’m guessing you’ve probably seen it. Basically, in that video, I started off on a hot streak and grew my account from $1,000 to $3600 or so before… imploding.
Also, I got a lot of questions on that video. Even though I thought I covered a lot of these in the beginning of that video, let me go over it again.
I will be trading futures, which isn’t subject to the Pattern Day Trader Rule. This is a USA rule for margin accounts trading stocks and options that basically states you must have at least $25,000 in your margin account to be able to make more than 3 day trades in a rolling 5-day period. That means futures, forex, and cash accounts are not subject to this rule… that’s how I can day trade with just $1,000.
Second, the broker I’m using is Tradovate. In my opinion, their platform is pretty solid for trading futures. There are commissions and fees, but that’s kind of the nature of the beast. What I like is in order to do a day trade on the e-mini S&P, you only need $550 in your account whereas a platform like TD Ameritrade, requires at least $6,600.
Third, there are several things I did wrong in my first video. The biggest mistake was being over-leveraged. With only a $1,000 account, I shouldn’t have been trading Nasdaq or S&P e-minis – I should’ve stayed with the micros, which are 1/10th that of the e-minis and worked on building up my account while minimizing my risk.
Fourth, I was doing a lot of quick scalp trades on the Nasdaq. I was generally looking at such small time frames and I think I should’ve really zoomed out, looked at the bigger picture to determine my plan of action. I also didn’t do much prep for the day before the market opened, which is kind of vital for any successful trader to do.
And fifth, when I’m in a trade, you can see my position at the top of the chart. A red negative number means I am short that many contracts and a green number means I am long. And it will show you the dollar amount that I am up or down in the trade right below. And again, the platform I’m using is Tradovate
Since that challenge, I spent the vast majority of the spring and summer learning and studying more and more… mostly focused on stock options since that is where I’m most comfortable and have seen the most success. Futures, however, is a completely different ballgame, and I haven’t really dabbled much more into since my last video on it. So I reloaded my account on Tradovate with $1,000 to try again and document the process.
Week 1
I started off my first day of the challenge trading Micro Nasdaq contracts which is 1/10th the size of your standard e-mini futures contracts.
My first trade was a small $9 win, which I guess I forgot to screen record, but at the bottom, we can see I traded four contracts, paid $2.44 in commissions and fees, and had a net profit of $6.56 after a holding the trade for 34 seconds. Not great, but let’s move on.
Next, I tried buying two contracts anticipating a move higher. And I didn’t have my brackets setup correctly, which automatically set my stop-loss and take profit levels, so I manually exited the trade once it turned against me. Looking back at it, I’m not really sure what I was thinking. Watching the playback of that trade I find it pretty embarrassing, but uh, there ya have it. Took a $42 loss off of a bad setup, so I can’t be surprised by that.
Took another L, and then the Nasdaq broke below previous support, so I entered a short position. First, with two contracts, and as it started working in my favor, I sold short an additional two contracts. The yellow line on my chart is VWAP, so my plan was to exit there as sometimes price can bounce off of it. I ended up with a $74 win on that trade. In hindsight, I wish I would’ve left maybe one contract as a runner, since the Nasdaq dropped 50 points in two minutes and as you can see, I left a fair amount on the table. But I had a plan and stuck to it, so I can’t really be upset with that.
That trade put me up one dollar on the day, but after fees and commissions, I was still down $11. I took another nice trade going short as the selling pressure looked strong, and I was anticipating a re-test of the previous low. That was good for $25. After the test of the previous low, I waited to see if buyers were going to defend that area or if sellers were going to overpower them. When price failed to break above the 615 level, I shorted it again.
My profit target was 1 standard deviation away from VWAP. In retrospect, I wish I would’ve entered closer to that rejection point at the moving average, but that’s okay. We can see price bounced off of my target, so I’m pleased with that scalp.
This brought me up to about $73 profit after commissions and fees.
And then, I took another trade short after price consolidated around my last exit. Unfortunately, I got shook out of this trade… I was thinking buyers were supporting that level, so I just scratched the trade for close to break even. And then, it dropped 20 points like I was originally anticipating.
Now unfortunately, I over-traded a bit and should’ve just walked away with my 7.3% gain on my account. I ended up finishing the day with almost $50 in gross profit, but because I traded too much, the fees added up and I was left with about $18 in profit.
The next day, at market open, I watched and waited to see if price could break out of previous resistance. The buyers kept trying to push price up, but sellers around the 15,600 level were too strong, so I was ready to sell short. I took a quick 7 and a quarter points in 12 seconds for a $29 profit.
I then took a trade long off of a pullback – again, I must’ve forgotten to screen record it, but that was my last good trade of the day, earning $34.
After that, I stopped seeing things clearly and took several bad trades.
And then, I took a trade off of the Micro Russell, which in theory would’ve been a fine trade, but price came down, stopped me out, and then continued onward without me. Classic. In hindsight, it just needed a few ticks more in breathing room, and I would’ve been fine.
I then took a revenge trade on it… you already know how this is gonna go. Took a $50 loss there. Just took hit after hit that day and tried selling short near the end of the day, but didn’t get my order filled, missing out on a pretty nice sell-off. I closed Wednesday off down $215. That one hurt.
Thursday opened up with some selling on the Nasdaq. I sold two contracts right around VWAP, which looking back at this, it was just not a good place to enter. If I wanted to short, I should’ve done it around the 670 level, so that I could exit the trade around VWAP. Watching this back in hindsight, I just have to roll my eyes at my past self and learn from my errors.
Starting with a $60 loss on a small account after a big losing day is no fun, so I went down to trading just 1 micro contract. And here, I got the trade right this time. I shorted at the 666 level and exited just above VWAP for 15 points.
It was a pretty unremarkable day of trading, trying to catch moves throughout the day and either taking a small profit or more often, little $10 to $15 losses each time. I ended up in the red about $62 by the end of the day.
Friday was kind of similar. I realized I was falling into old habits of trying to scalp little moves instead of waiting for higher probability setups. I get a little tunnel vision and look for quick little moves that really don’t have the type of risk vs reward that I should be looking for.
I had a decent trade going short on MES, but I got a little greedy and moved my take profit level to VWAP. Price retraced, so instead of keeping my levels as-is and taking a $60 profit, I ended up taking an $18 loss which was disappointing. I ended Friday with a $54 loss.
So my first week back to the futures ended up being a disappointing one, losing a total of $335.90 from my $1,000 account. Next week, I want to be more patient and wait for better entries to try and turn things around.
Week 2
Monday was fairly uneventful. I took a couple of losses looking for the Nas to drop lower, but got stopped out twice for close to a $75 loss.
I didn’t get any good trades on Tuesday and ended up with another red day. I didn’t trade on Wednesday due to some other things I had going on.
When Thursday came around, my account was almost half gone. And then, it was half gone.
Then, I took a look at Crude Oil. It was bouncing off the demand zone I had drawn out with my finest crayons. I bought two micro contracts and, as the trade worked in my favor, I moved my stop-loss up to ensure I’d give back minimal profit. I closed out the trade for $139 profit. I was pretty happy with how things went that day and ended up with a 70% win rate and a little over $100 profit after commissions and fees.
Friday was another uneventful day. I only took 4 trades and just about broke even.
So to end my second week, I just about broke even on trades. My win rate increased to 56%, but after fees and commissions, I still lost $42 on the account.
Week 3
Monday was pretty uninteresting. Tuesday was interesting, but in a bad way. And my screen recording software crashed after the first couple of trades, but pretty much every trade went against me. I took 16 trades and lost $215.
The next day, I caught a little early morning breakout for a nice profit and took just one loss and kept that to only $10. I finished the day up $45.62.
Thursday and Friday, I traded pretty minimally. I finished the week with a 55% win rate, but my losses were simply too big. I lost another $156 on the account.
Week 4
My fourth week was kind of the same as before. My win rate stayed about the same, but my wins simply aren’t big enough to outweigh my losses and all of the fees associated with placing each trade. Far too often, I’m getting shaken out of my trade and moving my stop-loss into profit far too soon. The main issue I have is I am afraid to lose money while filming this challenge and that causes me to stop out of a winning trade for a few bucks. When I have a losing trade however, I don’t move my stop-loss… which causes my wins to be too small and my losses to be too big. So a 54% win rate doesn’t really mean much when my risk to reward is too small.
Week 4 ended down another $240.
Week 5
Alright, another week of trading is over, let’s see how I did. With my account dwindling dangerously low, I dialed back the amount of trading I did. I traded mostly micro ES contracts, took a total of 10 trades, and finished with a 60% win rate and a $73 net profit for the week.
I then decided to go ahead and finish out the month of November with this challenge. I locked in a 66% win rate, but one of my biggest issues continues… and that’s taking these small little scalp trades where I move my stop-loss just above break even and take these small little gains which just racks up the amount of commissions and fees. So from just trading, I had about $200 of profit, but it was far too many trades, costing me $163 of that profit, which dwindled it down to just $35.52 of net profit for those couple days.
Final Results
So after five weeks of trading futures, I traded my $1,000 account down to $307.86 for a total loss of $692.14. And honestly, it was a pretty frustrating month of trading, mostly because I realize what I’m doing wrong, but for some reason, it’s been super difficult for me to correct these errors.
One aspect I found particularly enlightening was my actual gross profit and loss from my trades throughout this challenge. I only lost $188 and 25 cents from my trades. The bulk of my bankroll – $477 and 30 cents – went to Tradovate and the exchange fees that come along with futures. I had a 58% win rate throughout the challenge.
Trading really comes down to planning, patience, and execution. Throughout the day, it really becomes a challenge of keeping your head clear and emotions out of the trade. If you’re afraid to lose, you’ll cut your winners too soon, your stop-losses may be too tight, and in general, it’ll be hard to ever see any decent gains on your account when you trade like that.
But I will say, having screen recordings of me actually trading and going back through them really helps me see where I’m going wrong, and of course, having a journal where you track your trades and note why you entered a trade is all really helpful when you’re trying to plug the holes in your trading on your path to becoming consistently profitable.
Now I know this video was probably less exciting than my last attempt since I only traded micros, but with a small account, it is important to have better control over your bankroll and not get too wild over-leveraging.
For me, I’m looking forward to going back to options trading, but before I do, I decided to go head-to-head with a professional futures trader so you can see for yourself how a pro does things, and I’m willing to make a fool of myself yet again for the cause. So make sure you’re subscribed, hit that notification bell so you’ll be notified when that video goes live, and if you’d do me a favor and hit the thumbs up button on this video to ease the pain of my failures. That’s all for this one. See you in the next one.