AutoTrading Micro NQ and ES

[rolan]

Yeah. I thought the same.


I assume you didn't have a stop as you took a 100K unrealized drawdown. The market could easily have dropped enough that you were margin called, so consider yourself lucky. It's happened multiple times these last 5 years.


Large stops - > smaller size.


Big size - > smaller stops.


Big size + large stops = eventual blow-up.

Hi Laissez Faire,

Margin call is my disaster stop. I would sell just enough shares to meet margin (has happened before). Day in day out stop is indicator based, as they say, I think.

I need to keep size small at least until markets have really, really, really, really, really… sold off

Goal is not to exceed 25% exposure, where 100% is at risk of margin call.

 

[rolan]

Amen to that, that is position trade, luckily you have a large account.

I need to avoid thinking "position trade" because it usually doesn't end well when I started it as a short term trade . Otherwise large account quickly can become small account.

 

[rolan]

And we have lift off! Holding these to the close. Trying to get back to my high water mark (And then some).

 

[rolan]

Went ahead and took the strategy exit 1 on MES. Currently holding MNQ for the strategy exit 2.

 

[rolan]

Here's where I stand for those who may be wondering. Account took a recent huge 50% DD, and then I rode it all the way back up to approach my high water mark. The upside is that I didn't get a margin call, LOL. Let's see if I can be more careful.

Account value at market of $320,887 was marked-to-market at end of January including open positions. Now I am sitting at 365K.

 

[Laissez Faire]

So, you basically repeated the same mistake as the last time you took a major hit? I.e., holding large unrealized losses through a market drop?

I'm glad you survived and then some, but clearly this is a blow-up waiting to happen.

Large stops will give you a high win rate, but requires only one bad trade to give it all away.

 

[rolan]

Thanks for the reminder Laissez Faire. Yes the market was forgiving this time. This should be a stark reminder of what can happen.

 

[Overnight]

Thanks for the reminder Laissez Faire. Yes the market was forgiving this time. This should be a stark reminder of what can happen.

Your journal annoys me, only in this facet...

You do not realize the gold mine you are sitting on, with that cash balance. With recent market volatility over the past few months (and dare I say, years), you can simply swing a single contract in NQ (or ES) and make buku bucks, without all this messy layering in on micros to the point where you are overlevering on the micros and find yourself with 50% DD on a 360K account.

Just ONE mini contract is all you need, man!

 

[Laissez Faire]

Thanks for the reminder Laissez Faire. Yes the market was forgiving this time. This should be a stark reminder of what can happen.

It's a bit concerning that it happened twice in a row in such a short period of time.

I have a hunch the money on the long side won't be as easy and risk free this year as it's been in prior years.

I've blown a few smaller accounts doing similar mistakes, i.e., trading too large and not taking the stop. Sometimes it works great, but eventually it doesn't. I'd hate to see it happen with that handsome account of yours, unless you're already filthy rich and this is play money.

 

[Rickshaw Man]

I opened a futures account in October 2020 with $2000. My first trade got closed by broker due to margin call. I reloaded account, then worked on deploying an automated strategy to trade micros.

I think I currently have it in the form I can live with and not override (excessively). Before, I was trading the Russell and Dow micros, along with MNQ and MES. Now just trading MNQ and MES, as they seem to do better with my strategy. And I don’t want to trade too many instruments giving me exposure that I can’t live with. I also recently included 10 yr. US treasury futures as an uncorrelated instrument. It seems to spike during market drops, presumably due to speculators moving money to safer bets.

I’m, not sure what I want to accomplish with this journal, other than to say, “Look Ma what I can do!” I have been a lurker on ET for years, and just looking to add some content and bouncing ideas off of other traders.

Here are monthly brokerage profits/losses since opening my futures account. I will post monthly brokerage statement screenshots each month.

View attachment 273063

There was considerable amount of discretionary trading along with the automation leading to bigger DD in early 2021. The holds were for longer duration (few days), and I was trading more instruments (overleveraged). Now my holds typically average a few hours. The automation is on 24/7. I just don't feel comfortable holding more than a few hours, as the market reverses without warning.

More stuff to follow…

Could you please post your performance summery showing slippage and commission....Thanks! I tried running my strategy on the micros using 10 plus contracts and it was not worth it due to slippage. When I run 2 mini contracts i get better results.. Just curious what your looks like.