ES Journal - 2016
- Thread starter Buy1Sell2
- Start date
You must calculate the value of the contract. Here is what happens-- The trader uses high margin compared to their TLNW. They have a few wins and begin trading more contracts as they win. Then , catastrophe strikes and they are wiped out. However, the trader who manages risk effectively by looking at the full picture stays in the game during the down event, loses a smaller percentage and starts winning again. In addition, the trader utilizing analysis of full contract value in calculations, is less inclined to get anxious and make desperate or stupid moves. The only edge a trader has is risk management. Every entry /exit method is known to all traders---it is just the ability to manage those entries and exits prudently that is an edge to a trader.
Read the post just above this. In addition, A trader trading 1 ES contract with 10k will lose $200 or 2% of account at 4 point loss. A trader trading 1 ES contract with 20k with lose the same $200 but it will be just 1 percent of account. So, it makes sense to be prudent. --And also only hold no more than 20% of TLNW in trading account. Thus, you keep your toes tapping. That is the key to successful trading. --On the other side, when in a winner, let it run to maturity, whether that's a profit target or trailing stop etc. --Too many folks think that risk management is about cutting losses---but it's just as important to reap max benefit from winners. This is the only edge in trading.
This discussion has given me a great idea!
I will draw my account down to $500, then attempt to make a profitable trade for 1 ES point. If successful I will then call my broker and demand they deposit $10,000 into my account. After all, I was trading at 200:1 margin. It makes perfect sense that I earned the equivalent of 200 ES points.
I will draw my account down to $500, then attempt to make a profitable trade for 1 ES point. If successful I will then call my broker and demand they deposit $10,000 into my account. After all, I was trading at 200:1 margin. It makes perfect sense that I earned the equivalent of 200 ES points.
Sunday Gap up.
This is absurd, depends on risk, an adept daytrader shouldnt need 10k to trade 1-2 contracts, that's a complete absurdity, as it's trading ES with requirements as little as 300-500 per car, same degree of insanity.
TDFJIP