Determining optimal # of contracts to buy when daytrading emini S&P 500

There's been some good advice on this thread, if you disregard the loonies.

But what I would recommend is that you get yourself a copy of Market System Analyzer from adaptrade.com, and put in your historical trade data. You will be able to analyze the results a gazillion different ways, and play with a large number of position sizing strategies.

At the end of the day, you should come up with a position sizing scheme that you are comfortable with in a number of different metrics.

I have no connection with the company, just a satisfied user. There may be other similar programs out there, look around. (when I did, everything else was much more expensive, but that could have changed)
 
Quote from chanelops:

There's been some good advice on this thread, if you disregard the loonies.

But what I would recommend is that you get yourself a copy of Market System Analyzer from adaptrade.com, and put in your historical trade data. You will be able to analyze the results a gazillion different ways, and play with a large number of position sizing strategies.

At the end of the day, you should come up with a position sizing scheme that you are comfortable with in a number of different metrics.

I have no connection with the company, just a satisfied user. There may be other similar programs out there, look around. (when I did, everything else was much more expensive, but that could have changed)
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Thank you Chanelops. I'll have to take a look at that. In regards to the loonies, it would be nice if they bothered reading the whole thread before making stupid assumptions.
 
Quote from Thundershock:

Assume that you have a $10000 account. Your broker allows you to daytrade 1 emini S&P 500 contract for as little as $1000. How many contracts would you buy assuming you average 80% winning trades with an average gain for winning trades of 5 points and an average loss of 5 points with 10 points being the most you'll ever lose (stop loss)??

I'm guessing that it's safe given this, to buy 7 contracts?
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trading the ES using these assumptions will guarantee a busted account....

there are no presumptions that can be relied upon consistently in humanly achievable terms that can produce percentages, especially percentages that can be relied upon.

experience has proven that the approach to trading the EMini contracts of the Equity derivative type has to be approached as new each day, each hour, each measured period or interval.

experience has proven that those who expect to place bands of predictability around the upper and lower trading ranges and then expect somehow reality to stay within them have delivered busted account after account after account,

so your premises are flawed, everything else after that just doesn't make sense...
 
Quote from limitdown:

trading the ES using these assumptions will guarantee a busted account....

there are no presumptions that can be relied upon consistently in humanly achievable terms that can produce percentages, especially percentages that can be relied upon.

experience has proven that the approach to trading the EMini contracts of the Equity derivative type has to be approached as new each day, each hour, each measured period or interval.

experience has proven that those who expect to place bands of predictability around the upper and lower trading ranges and then expect somehow reality to stay within them have delivered busted account after account after account,

so your premises are flawed, everything else after that just doesn't make sense...
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With all due respect limit down, if you can't make assumptions based on historical data, then you're arguing that technical analysis is invalid. Granted percentages are constantly changing. The key is are they changing outside of expected norms? I never based any predictions on upper and lower trading ranges. I base all of mine on TA. The bands of upper and lower trading ranges only act as a circuit breaker if my trade suddenly does an absolute nosedive against me without any warning from TA. I'll see if I can post a chart to illustrate what I mean.
 
As you can see on the attached chart with this sample scenario of my stop loss in action, I went short at 10am and then when the trade started to look like it might go bad, I had my stop loss set ahead of time so I'd get out if it went above 1126. Before I set that stop loss though, I already had a 10 point stop loss in place from when I first went short at 10am. This ensured that I kept the gains I made and protected me in case the trade immediately went against me by a huge amount.
 

Attachments

Quote from Thundershock:

With all due respect limit down, if you can't make assumptions based on historical data, then you're arguing that technical analysis is invalid. Granted percentages are constantly changing. The key is are they changing outside of expected norms? I never based any predictions on upper and lower trading ranges. I base all of mine on TA. The bands of upper and lower trading ranges only act as a circuit breaker if my trade suddenly does an absolute nosedive against me without any warning from TA. I'll see if I can post a chart to illustrate what I mean.
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What timescale are you using Thunder?

The shorter the timescale the less expectations I would have.

And that nth deviation can and will happen in the marketplace. So trust your new friend limitdown when he says be careful.
 
Algo, I work on an hourly chart for my trades. I'll use the 15 minute chart though sometimes for extra help as well as the daily, weekly and monthly chart. I agree that sometimes totally unexpected things happen like when the market crashed a few weeks ago. That's where stop losses help. I know it's silly to use stop losses based on a fixed number, but I also believe everyone should set a maximum loss number that they're willing to accept in a day. This will allow you fight another day and not get wiped out if for example you got caught on the wrong side of that market crash. (I'm willing to bet a few people here tried catching the bottom of that falling knife when it got vastly oversold but ended up misjudging and before they knew it, were wiped out)
 
LOL...we have a winner!

Quote from Thundershock:

Have any of you guys used Ben's Easypick System before? http://www.easypick.hostzi.com He seems to have a great track record. I'm thinking of joining but I just wanted to check on here first.
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http://www.elitetrader.com/vb/showthread.php?s=&postid=2721942#post2721942

Four months later....
Quote from Thundershock:

I'm the owner of Ben's Stock Picks http://easypick.hostzi.com Feel free to email me and I can answer any questions you might have.
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http://www.elitetrader.com/vb/showthread.php?s=&postid=2849133#post2849133
 
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