Oppps... you're absolutely right. And I have to apologize that here, its my mistake. I got my time zones mixed up as my ET is set for a different time zone than my charts. When I saw your post later yesterday, I forgot to do the calculation in my head and thought you posted this shortly after the open. The fact that you said it was a buy stop was actually a clue, but I dismissed it, since yes, a buystop would require price to come up. Anyway, so for this one, I have to admit I'm wrong and apologize.
ES Journal - 2016
- Thread starter Buy1Sell2
- Start date
This metric of YOURS, n to 1 margin, is complete BS, as far as trading futures is concerned. It doesn't matter one iota if you put up $400 or 4M per contract. In the ES the tic value is 12.50. That fact has absolutely nothing to do with the amount of "margin" a participant is required, or otherwise chooses, to put up, period. Unless you traded 10 contracts, talking about some equivalence is nothing more than a fisherman's tale. BTW, nothing wrong with capturing 12.25 pts on however many it was.
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It's all good
You're confused about how I am using the word "margin". I don't get close to the minimum margin requirements of the exchange. Here is an example of what I am talking about: lets say the trading account is 100k and the ES is at 2000. Thus, the value of 1 ES contract is 100k. If I traded 1 contract, that would be 1 to 1 margin. However, if I trade 10 contracts, the value of what I control is 1 million, therefore I am at 10 to 1 margin. It then follows that a swing trade with 4 to 1 margin would be 4 contracts. So at 10 to 1 you would have 10k behind each contract and at 4 to 1 you would 25k behind each contract. Notice how it has nothing to do with exchange minimums.
Im not confused. You're just extrapolating trying to sound like a bigger, better, trader than you are. As I said initially, it doesn't matter one iota if you have $400 or 4 million dollars "behind each contract". Unlike stock where the amount of money put up, directly affects how much stock you control, therefore affects the value of each tic, ES is 12.50 per tic, period. $400 or 4 million behind each contract doesn't matter. In fact, an argument can be made from a day trading standpoint, that it's not good use of money to put up more than required+ a small cushion. If you traded 1 contract with 4 million behind it, you picked up 12.25 pts x $50 per point. If you traded 1 contract with $400 behind it, you picked up 12.25 pts x $50 per point. Unless you traded 10 contracts, your margin metric and it's "equivalence" is just an ego boosting fisherman's tale.
This shows that you don't understand what I'm discussing here. In my example. at 4 to 1 margin, I would be trading 4 contracts with 100k trading account and at 10 to 1 margin , I would be trading 10 contracts. By the way 400 behind a contract would be 250 to 1 margin. --and having 4 million behind each contract would be 1 to 40 margin . So, as the casual reader can see, a gain of 12.25 pts as a percentage of trading account means quite a bit more with higher margin. Thus, I use higher margin and smaller stops on day trades, than I do on swing and position trades. There would never be a reason to be over 10 to 1 margin at any time by the way.
Honestly, we are all very confused. Here is a straight question. On Wednesday, when you said you had a net gain of 12.25 points, how many contracts were you trading for each trade? (ie. your first trade was +1 points, how many contracts did you enter short? was this also the same number of contracts for the second short which netted you +6.5 points, and the last trade which netted you 4.75 points)
--and then here you make my point for me and indicate agreement---Thanks for posting ===Izzy.
Same number of contracts each time. It's more than 1.
Ok, great. Now when you say you made 12.25 points on your trades, and then you say you made the equivalent of 122.50 ES points, this would mean you made $6,125. The only way for this to happen would be with 10 contracts. So is your number of contracts per trade different than 10? It just makes no sense for you to say your stuff about 10 to 1 margin, but please don't explain any further because I can't take it. I'm just curious if 10 is the number of contracts that you're trading to arrive at the equivalent of 122.50 ES points in profits.