at what point does it get difficult to manage trades consistently in terms of number of contracts, in regards to intraday. I rarely trade more than 3 contracts in a lot, beyond that it gets nerve wrecking.
amateurs have no chance
- Thread starter dozu888
- Start date
There are several elements that influence the size you can trade.
For me the most important are:
- how emotional are you as a trader. Can you trade your system for 100% or not?
- how is your financial situation. Don't you overtrade?
- how much can the market absorb without heavy price movements. Liquidity changes during the day, so low liquidity makes it difficult to trade big size. But in the main futures, like ES, liquidity is no problem at all for 99% of us.
If you trade starting with 3 contracts ES with a margin of $1.650/contract, you will have following results if you compound your profits for 1 year:
- making 1 point a day and max 3 contracts you will end with $35.235 profits
- making 1 point a day and max 25 contracts you will end with $235.440 profits
- making 1 point a day and max 50 contracts you will end with $417.105 profits
- making 2 points a day and max 3 contracts you will end with $74.385 profits
- making 2 points a day and max 25 contracts you will end with $560.120 profits
- making 2 points a day and max 50 contracts you will end with $1.065.615 profits
I'm curious, do you rarely trade more than 3 contracts because you have discipline that controls your position size management or because you put something in place that prevents you from trading more than 3 contracts such as keeping your account (capital) low enough that you are only able to trade 3 contracts ?
For example of the latter above...pretend your broker requires 10k per contract but you've already realized in the past that you become too emotional while trading and you trade too much size on a 150k account (capital) via trading 15 contracts but you're able to maintain your emotional control when you only trade 3 contracts...
Keeping your capital to 35k will only allow you to trade just 3 contracts (10k per contract). Next, whenever your profits take you above 40k (allowing you to trade 4 contracts)...you remove 5k from the account to reinforce the 3 contract rule.
I've wonder how others deal with their position size management when they have discipline problems in which they need a way that prevents them from trading more than a specific size.
wrbtrader
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i rarely trade more than 3 contracts as it has everything to do with the points you listed, since i am intraday with each trade lasting less than an average of 2 minutes. Even though with $500 margin for 1 contract i can trade upto 30 contracts with bit of leeway for drawdowns yet those trades that i take with larger contracts are really stressful. eventually i know we all have to scale up once we get comfortable with our system. I have in the past blown up my account by not implementing proper position size management. For me nowadays the appetite for risk is very low, don't have the stomach for adverse price movements once i get into trades. I don't have the gamblers attitude or the bravado anymore, seems more like a cowardly way of trading as i run or exit at first sign of price going against me. I seem to be able to better absorb losses of a point or two without getting emotional about the losses with 3 contracts or less in tow. also it better prepares me to wait for next trade without making irrational descisions after such losses. May be it might be undercapitalization and fear of blowing out the account by being greedy. Once i reach the 100k and up maybe things might change. for now i am in the quarter of a 100K mark, started from 10k and reached the quarter mark in 1.5 months.just wanted to know the psychology of traders who do larger lots. As schweiz has mentioned it is culmination of few points that he takes into account when trading large lots.
it should be all relative to how much you have..the % risk per trade should never change.. adding to winners is another trade..not the initial trade!!
you sound like you are not in control..which is bad..you should enter when the time is right..and exit when the time is right also..after all..time = money..does it not!!
you sound like you are not in control..which is bad..you should enter when the time is right..and exit when the time is right also..after all..time = money..does it not!!
In the future, could you please use commas as separators, instead of period marks? It would be easier on the eyes.
kthanxbye
Great Britain and the United States are two of the few places in the world that use a period to indicate the decimal place. Many other countries use a comma instead. The decimal separator is also called the radix character. Likewise, while the U.K. and U.S. use a comma to separate groups of thousands, many other countries use a period instead, and some countries separate thousands groups with a thin space.
Which countries use periods to separate groups of base 10 numbering?
Italy, Germany, Norway, Spain ...
Oh. Happy penny separating I guess?