Futures: Make $15,000 a day
- Thread starter TheCaymanIsland
- Start date
Is his name Doug Allen?
It's really just a matter of scale with the mini's. I've not traded them in about 2 years, but when I was managing money I did not have any problem with 120/150 contracts on a trade. My system "only" made about 3 NQ points on average per day, but it worked out very nicely in the end, coz again it just comes down to scaling it up. Good luck.
Quote from MandelbrotSet:
Here's anoher serious reply:
If you have to come here and ask people what the appropriate "risk metrics" are then they choose the wrong person, and you should rescind the offer before you blow their account ... or you could just pull a Madoff.
ROFLMAO!!!!!!!!!!!!
That is part of the risk that has to be decided so I think a starting point is determining what amount of return I should be able to generate on 1 contract and then extrapolate that out to hit the 15,000 goal.
15K is a realistic amount for a hedge fund. In my experience (2 years trading for a hedge fund in the past), depending on what you trade, you should assume a maximum annual return of 20%. This means you need to have a minimum capital to start with of about 20 Million. If you make more, that is fine.
Now, as far as contracts per day, you need to design a trading algorithm that will risk no more than 1% on each trade and generate enough trades to reach your goal. This is to keep your risk of ruin low.
For example, let us assume you are trading Crude futures and you have an objective of $0.5 per trade and a stop loss of $1 per trade. With 20 Million you can risk 0.01 x 20,000,000 or an amount of 200,000 on each trade and this means you need to buy or sell 200 contracts each time, since 200 x $1,000 = 200,000
Thus, each time you win you make 100,000 and each time you lose 200,000. If you can maintain that, then your expectancy per trade, assuming you can make a trade per day, will be 15,000 if
15,000 = w x 100,000 - (1-w) x 200,000
Solving for w we get: 71.6%
So you need to have a win rate of more than 71% to get your average daily return.
If your trade every 2 days, then you need to have a higher win rate so that your expectancy is 30,000 per two days,
w = (30,000 +200,000)/300,000 = 76.66%
As you can see, you need to be more profitable and this becomes a problem as the frequency of trades decreases.
In general, if your trading frequency is N, then
N x E = avg. win x w - (1-w) x avg. loss
I suggest you read this paper and also this one before you start doing anything. They can save you a lot of time and trouble.
Instead of breaking your head on hypothetical returns you should just start trading 1 contract. You will see within days what is realistic and what isn't.
Can you give an example of an "algorithmic futures platform"?
Do you mean something like moving averages and trend following or something like a high frequency scalping algorithm?
It's like going to a car forum and telling people you want to buy a good car.
First of all, I would never look at how much I will be making a day.
I would concentrate on Risk/reward management. How much capital you have and how much money you are going to make out of it. What is your risk tolerance? When it goes against you do you have your stops placed to keep that 15K you are talking about.
Do not think of quick money marketing scams.
Good Luck.
I would concentrate on Risk/reward management. How much capital you have and how much money you are going to make out of it. What is your risk tolerance? When it goes against you do you have your stops placed to keep that 15K you are talking about.
Do not think of quick money marketing scams.
Good Luck.