A bit of an educational post for the guys that want to start trading futures, I encourage it but read this before you do anything at all.

Alright, so now things are very bullish and I see a lot of people that want to start trading and I'm seeing a ton of horrible information in here by people that think of themselves as experts. The fact is, everyone is making money on this market, I see countless reddit experts (not) that go around giving awful advice because they are making money, well, these so called experts will lose it all when markets go back to normal and not parabolic, which is 90% of the time and that's because they don't even understand the most basic principle of trading which is risk management. I am not going to give you my credentials or anything, I frankly don't give a crap if you follow my advice or not, the fact is, if one day you want to be a consistently profitable trader you will HAVE to start managing your risk, you can learn this lesson more cheaply or in a more expensive manner, if you want to be successful in this business it's not a matter of if you should do this it's a matter of when you start doing this, and the sooner you start doing this the sooner you set yourself in the right path, because one day that wick will keep going and take all your money, it will happen, it's as simple as that. You can be wise enough to see the logic in this and follow my advice or ignore this advice, frankly, I don't give a shit about you, I'm just doing this because once I've learned this from an internet random stranger and so I gotta give some back.

Now let's get to the simple and juicy part. I am not going to tell you a strategy on how to trade or anything like that, you do that work, I'm going to tell you how to manage risk, so let's get started.

If you are trading, unless you build a position for years to come, every time you open a trade you MUST put a Stoploss, and YOU MUST DO IT, there is no way around it, if you don't you are a fucking moron.

Okey so let's say we have a portofolio of 1000 USD, we want to risk one percent of that per trade so that means if our Stoploss gets triggered we lost 10 bucks. That ensures that you can be enough of a moron to get things wrong 80 times in a row and still have money left to practice. Trading is like any job, you must allow yourself to make plenty of mistakes to learn, if you are bankrupt after 20 trades gone wrong then you've given yourself very little chance to learn something, this way you have to make 100 mistakes in a row to go bust and that would give you plenty of room to make a lot of mistakes and learn a ton, it's like any job, the more mistakes and experience you get the better u get at it, if you don't allow yourself to make a lot of mistakes you are not allowing yourself to get experience so risk management is crucial, frankly it's even better if you only risk 0.5% per trade.

Now, before you do any trade you must calculate your position size according to where your Stoploss is relative to your entry point, Stoploss placement should never be static, it should be different on each trade and in every trade it will be placed at a different distance relative to your entry. So here are the math:

Let's say you have 1k portofolio, set risk is 10 bucks(1%). You identify a particular set up and on that set up the Stoploss placement is 4% away from your entry, the math go like this in this scenario: 10/0.04=250usd position size. That means in that particular trade you must enter with 250 usd and if the price drops 4% to your Stoploss you are going to lose 10 bucks.

Another example with the same portofolio of 1k but this time the Stoploss is tighter at 0.37 away from entry. Then the math go: 10/0.0037=2702$ position size, so if the price drops 0.37% you lose 10 bucks again.

Last example with a wider Stoploss at 13% math go 10/0.13=76.9$.

That's it, it's that simple, that's how you manage risk.

If you think that by following these steps you'll get nowhere and won't make money because it's too slow because your portofolio is small then you are a fucking moron, but it's okay I was too, listen to this and get some perspective:

Don't fall into the trap of thinking you need to risk more to make more money, if you grab 500 bucks and consistently make 0.5% per day increases you will have $4,486,379.70 in 5 years, yes it's called compounding interest and it's fucking magic, does that sound too slow to you? use compounding to your advantage so please KEEP THE BIGGER PICTURE IN MIND AND TRACK YOUR PROGRESS IN %. Doesn't matter if you have 100 usd or 100k it means the same. MANAGE RISK AND DONT SCREW YOUR PLAN TO GET RICH.

You need to stop thinking in dollar amounts and you need to start thinking in percentage terms to get a good idea of your progress, if you can turn 100 usd into 200 usd slowly with consistency throughout trades in which proper risk management rules have been applied then it's the same as turning 100k into 200k, it's both a 100% gains, both scenarios hold the same merit (given if you followed proper risk management, not if you made it through one or two trades through using reckless leverage) if you track your % gains relative to your portofolio you can get an actual idea of your progress and it would apply to any amount, if you can turn 500 usd to 1k through trades with proper risk management you can turn 500k to a million. Trading success is about having two ingredients right working in synch which is risk to reward relative to your hit rate on a particular pattern that you are trading. If you have a pattern that gives 50% hit rate then you need trades with over 1.5 risk to reward to make money, that means you'd risk 1% to make 1.5% if you risked 1% to make 1% you'd just break even.

Anyways, you need to follow these steps like it or not, if you don't maybe in this bull market youll still make money but eventually you will give it all back because you won't have a good base, if you want to be a consistently profitable trader you need to do this, there is no way around it, period. Keep in mind the bigger picture and manage your risk.

Hopefully I was of help.

Edit: I can't see more than half of the comments, reddit says they are there but I can't see them

Also guys don't aimlessly set Stoplosses, you need to set them but at places that make sense. Trading is a system, you need an edge and you need to trade every time your edge shows up in the charts and whenever you trade you need to set a Stoploss, but not randomly.