Any veteran of the financial markets will likely agree to the common saying, “Active trading is the hardest way to make an easy buck.” You may or may not agree with this sentiment, but it is difficult to argue with the empirical data. In fact, washout rates for new traders of all types are estimated to be upward of 70 percent. This daunting statistic raises a valid question about whether it is wise to attempt trading E-mini futures for a living.
To be sure, sustaining your lifestyle solely from active trading is a serious endeavor. If you don’t have adequate resources, expertise, and proper perspective, things are destined to end poorly. Nonetheless, for those traders who are true market professionals, the rewards far outweigh the risks.
What Constitutes a Living?
The largest mistake that 99 percent of losing traders make is that their goals are not aligned to their resources. Falling short in this area can undermine the validity and effectiveness of even the strongest trading strategy.
For any venture into the marketplace to be successful, it is imperative that available inputs are capable of producing the desired output. In the case of making a living, this means that proceeds from trading must cover all real-world expenses. Depending on your lifestyle, earning enough in the markets to pay the bills can be challenging.
Fortunately for aspiring futures traders, the E-mini lineup of products on the Chicago Mercantile Exchange (CME) opens the door to many opportunities. If you’re interested in trading E-mini futures for a living, then the CME is the best place to start.
Any trades are educational examples only. They do not include commissions and fees.
Earning an Acceptable Return
To illustrate the relationship between resources and goals, assume that Frances the futures trader has monthly expenses totaling $5,000. She decides to target the ever-popular E-mini S&P 500 to generate revenue. Realistically, there are several strategies that will give her a chance of trading E-mini futures for a living:
- Scalping: Scalping strategies garner profits from executing a high volume of trades on compressed timeframes. Assuming 20 trading days per month, a 30 percent success rate, and a $50/$150 risk versus reward, Frances will need to execute 500 trades (25 per day) to gross $5,000 in profit.
- Day trading: Day trading involves taking 1-2 trades per day. This typically entails opening a position early in the session and closing it out ahead of daily settlement. Assuming 20 trading days per month, a 40 percent success rate, and a $200/$600 risk versus reward, Frances will need to execute 42 trades (two per day) to gross $5,000 in profit.
- Swing trading: Swing trading is a multisession strategy, with normal durations ranging from 2-6 days. Overnight margin requirements must be satisfied to swing trade, thus increasing the amount of risk capital needed. Assuming 20 trading days per month, a 60 percent success rate, and a $500/$1500 risk versus reward, Frances will need to execute six trades (1-2 per week) to reach $5,000 in profit.
Not accounting for commissions and slippage, these strategic frameworks show that it is theoretically possible to make a living trading E-mini futures. Given a solid success rate and positive risk versus reward scenario, long-run profitability is attainable.
However, it is important to realize that each type of strategy comes with a set of unique advantages and disadvantages. So, though it may be technically possible to make a living trading E-mini futures from scalping or swing trading the E-mini S&Ps, several considerations must be made. Among them are trade-related efficiencies, margin requirements, and market state. Ultimately, the responsibility for choosing your best course of action falls upon you, the trader.
Trading E-Mini Futures for a Living Is Possible
Being a professional futures trader can be a very rewarding experience, both personally and financially. To learn more about the many opportunities that trading futures offers, schedule your free one-on-one consultation with a member of the StoneX team today.
FAQs
Not accounting for commissions and slippage, these strategic frameworks show that it is theoretically possible to make a living trading E-mini futures. Given a solid success rate and positive risk versus reward scenario, long-run profitability is attainable.
Is it possible to trade futures for a living? ›
By focusing on a single market, you can get up to speed quicker. Trading futures for a living is a compelling idea — but to do it successfully, you'll need sufficient startup capital and a well-designed trading plan.
Can you actually make money trading futures? ›
In the world of futures trading, success can mean significant profits—but mistakes can be extremely costly. That's why it's so important to have a strategy in place before you start trading.
How much money do you need to trade mini futures? ›
There is no legal minimum on what balance you must maintain to day trade futures, although you must have enough in the account to cover all day trading margins and fluctuations which result from your positions. These can vary by broker however some require as little as $500 to open an account.
How many E-mini contracts can I trade? ›
How Many E-mini Contracts Can I Trade? Theoretically, you can trade as many E-mini contracts as your account balance allows you. Because E-mini contracts are traded on margin ($500/contract) you can trade more contracts with less money.
Can I trade futures with $100? ›
This can be a risky form of trading, but it also has the potential to generate large profits. If you are starting with a small amount of capital, such as $10 to $100, it is still possible to make money on futures trading.
Is trading for a living realistic? ›
Trading is often viewed as a high barrier-to-entry profession, but as long as you have both ambition and patience, you can trade for a living (even with little to no money). Trading can become a full-time career opportunity, a part-time opportunity, or just a way to generate supplemental income.
What is the success rate of futures trading? ›
Tradeciety provides clearer and more time-specific futures trading stats–namely, that 40% of all futures day traders quit in 4 months, 80% quit within a year, and that only 7% are able to last 5 years or more. Bear in mind that among the 20% who last over a year, not all of them are profitable, just persistent.
Can you make a living trading micro futures? ›
Trading E-Mini Futures for a Living Is Possible
Being a professional futures trader can be a very rewarding experience, both personally and financially. To learn more about the many opportunities that trading futures offers, schedule your free one-on-one consultation with a member of the StoneX team today.
Which futures is most profitable? ›
What futures are most profitable? Trading in futures markets such as the Micro E-Mini Russell 2000 (M2K), Micro E-Mini S&P 500 (MES), Micro E-Mini Dow (MYM), and Micro E-Micro FX contracts can be highly profitable due to their distinct market characteristics.
Some small futures brokers offer accounts with a minimum deposit of $500 or less, but some of the better-known brokers that offer futures will require minimum deposits of as much as $5,000 to $10,000.
How much does a 1 micro E-mini contract cost? ›
Can I trade futures with 200 dollars? ›
This will ultimately determine how much money you will need to have in your account for each contract you trade. The range varies from as little as $500 to $5,000 USD per contract for the mini products. But if you are brand new, you can start trading micro futures for as little as $50 to $400 per contract.
Can you day trade futures without 25k? ›
A pattern day trader who executes four or more round turns in a single security within a week is required to maintain a minimum equity of $25,000 in their brokerage account. But a futures trader is not required to meet this minimum account size.
How to trade E-mini futures example? ›
In other words, if the E-mini is trading at 2,380.00, the full cash value would be $119,000/ contract (2,380.00 * $50.00). Therefore, a trader would be able to hold $119,000 worth of stock for only $5,060/contract (initial margin) or 4.7% of the full cash value.
What is the best futures trading platform? ›
Best online brokers for futures
- Interactive Brokers.
- E*TRADE by Morgan Stanley.
- Charles Schwab.
- tastytrade.
- TradeStation.
Futures Trader Salary
| Annual Salary | Weekly Pay |
|---|
| Top Earners | $192,500 | $3,701 |
| 75th Percentile | $181,000 | $3,480 |
| Average | $101,533 | $1,952 |
| 25th Percentile | $57,500 | $1,105 |
Futures Trader career paths
Futures traders can explore various career paths, including account management, property management, and portfolio management. They can also transition into leadership roles such as general management, operations director, and assistant vice president operations.
Do you need 25k to trade futures? ›
To apply for futures trading approval, your account must have: Margin approval (check your margin approval) An account minimum of $1,500 (required for margin accounts.) A minimum net liquidation value (NLV) of $25,000 to trade futures in an IRA.
