Trading with $500 Day Trading Margins for Emini S&P Futures is NOT Recommended

The competition on the Emini SP futures contract has become so fierce, that futures brokerages have decided to “utilize” a strategy where they are simply “killing” future (no pun intended) futures traders by proving margins that are against common sense. Now brokerages provide $500 day trading margins for the Emini S&P which is one of the sought after instruments by day traders.

Essentially, a trader with $5K, could trade up to 10 contracts.
Let’s do the math: if a trader loses more than 5 full points ($50 per point), its:
5 pointsX10 Contracts x $50 a point = $2,500 (50% of $5,000)
How long does a customer last with this mentality of trading? A week?a month?
Does a trader have a chance to withstand drawdowns in his/her account?

New traders, always look at day trading from the reward side. Trade more contracts; go for less points, etc.
But, brokers should warn new comers, what day trading is all about, and how difficult it is, and how carefully they should proceed. It’s called fiduciary duty!

Traders, STOP being attracted to low margins because futures are leveraged as is. You have good trading platfroms in the market place, good commissions rates, and above all you have the chance to develop your skills as a trader without being “pushed”.
Everything starts from common sense. Do what is right for your capital, not your greed factor.
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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