Quotations by Markus Heitkoetter

When day trading futures, options, or forex, you can use leverage and trade multiple contracts on a rather small account. The average profit should be at least 50% higher than your average loss, preferably even twice as high. In the first four weeks of your trading, you might set your weekly target at $100 per contract. The key element to trading success is having a sound trading strategy that produces consistent profits. [2008] - Markus Heitkoetter

If you want to day trade stocks, then you need at least $25,000 in your trading account. If you want to day trade futures, then you should have between $5,000 and $10,000 in your trading account. When trading options, you should have between $1,000 and $5,000 in your trading account. If you’re thinking about trading forex, then you can start with as little as $500 in your trading account. [2008] - Markus Heitkoetter

Average daily movements for three different currency pairs: EUR/USD - between 0.5% and 1% per day; USD/JPY - between 0.5% and 1.5% per day; GBP/USD - between 0.5% and 1.5% per day. [2008] - Markus Heitkoetter

Stock options are a fantastic instrument to trade when traded on daily or weekly charts. Day trading stock options is extremely risky and difficult, and not for the novice trader. [2008] - Markus Heitkoetter

when selecting a very small timeframe like 1-minute, 3-minute, or 5-minute, you might experience a lot of “noise” that is cause by hedge funds, by scalpers, and by automated trading. Therefore I recommend using 15-minute charts. [2008] - Markus Heitkoetter

Stop loss and profit-taking exit rules can be expressed in four ways: 1. A fixed dollar amount (e.g. $1,000); 2. A percentage of the current price (e.g. 1% of the entry price); 3. A percentage of the volatility (e.g. 50% of the average daily movement); 4. Based on technical analysis (e.g. support and resistance levels). [2008] - Markus Heitkoetter

A good time-stop is three times the timeframe you’re using. If you’re using 15-minute charts, you might want to abandon the trade if neither your profit nor your stop loss is hit after 45 minutes. If you’re using 60 minute charts, get out after 3 hours. [2008] - Markus Heitkoetter

The more trades you use in your back-testing, the higher the probability that your trading strategy will succeed in the future. 50/100/200/300/500 number of trades have 14%/10%/7%/6%/4% of margin of error. You need at least 40 trades in order to produce statistically relevant results. [2008] - Markus Heitkoetter

The best trading systems have less than ten rules. [2008] - Markus Heitkoetter

Usually you can expect the following from a robust trading system: 1. A winning percentage of 60-80%; 2. A profit factor of 1.3-2.5; 3. A maximum drawdown of 10-20% of the yearly profit. [2008] - Markus Heitkoetter

The perfect balance between risk and reward is 1:1.5 or more – i.e. for every dollar you risk you should be able to make at least $1.50. In other words, if you apply a stop loss of $100, your profit target should be at least $150. [2008] - Markus Heitkoetter

Find a system that produces at least five trades per week. [2008] - Markus Heitkoetter

Trade only twice a day – once in the morning and once in the afternoon. Continue trading this way for at least the first 2 to 3 months. [2008] - Markus Heitkoetter