Just a quick comment.
First, I think it is possible to make 2% per day in the ES. I think the amount you're trading with is more or less irrelevant to whether you make 2%, except when the account gets too big. But for accounts up to let's say $100K, I think it can be done.
What makes this type of return possible is a couple of things. One is leverage. For instance, on a $20K account I think a guy trading 4 contracts could conceivably average $400 per day.
But the next issue is that leverage means risk. And unless you're disciplined, this leverage will be your undoing.
And of course finally, you have to have a technique that actually gives you the edge to generate consistent returns.
Now, an observation. You're not providing a whole lot of information. But based on what I hear, I would be concerned about how all of this is going to work out for you. When you say you make "72 trades" for instance, to me I understand this as 72 roundturn trades. Now maybe you don't mean that. Maybe what you really meant is that you actually made 12 trades, with 6 contracts each. See what I mean? One day you said you made "33 trades". Your statement shows 33 ES, and 40 ER2. So I gather that this day you made 33 trades of 1contract, hedged somehow by 40 ER2.
Whatever, it appears that you are making one helluva alot of trades. And evidently each of those trades is hedged, which means that you create double commissions, and double friction in the market from bid/ask spread and slippage.
I also note you've had some very large losses in relation to the gains that you have made (on a daily basis). No details on what took place on those days, but something is really out of whack here. Either you had some lapses of discipline, or something is wrong with the strategy.
But to compare, I don't hedge. I'm purely a directional trades. I would say that most of the time I don't need to make over 5-10 round-turn trades in a day. Once in a while maybe. Less is more though. Alot depends on volatility, but I'm looking typically for 5-10 handles in a trade on the ES, generally not risking more than 2-3 depending on the trade. Talking here about daytrades by the way, not swing trades which is a somewhat different animal.
Just throwing all this out there. It is possible to do what you suggest. I'm concerned though about what looks to be alot of overtrading. As one who has traded this market most days since 1982 in the S&P futures, I just don't believe there are that many good trades in a day. And if your system is actually generating that many, I gotta question it.
Equally, I agree with the poster who suggested that the hedging simply detracted from the basic trade. You as much as confirmed that at one point saying that if you were long, and then got a sell signal, you would hedge, etc etc. All that means is that rather than to get out (the disciplined method), you hedge with another instrument so that you don't lose on the original. I think that sounds like a weakness to me.
By the way, there are spread traders who happen to trade that way. Some do very well.
Anyway, just throwing some of this out there without knowing what your strategy is, or how you're trading at all. If none of it makes any sense, just discard it.
OldTrader
