Going From 1 to 10 lots to REDUCE Stress?

Quote from aeliodon:

For example: 10YM points a day on average is like over 15% a year and similarly for ES - 1 point a day average is over 10% a year.

Any thoughts?
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Yes. Your math sucks.

10 YM and 1 ES are exactly the same, if it is payed by the same account value, the underlying's real value is irrelevant....

And without knowing the account's size, you can't say how much it is in %...

Otherwise your idea is interesting, keep us posted how it is working for you...
 
It's all about baby steps.

- Paper
- Minimal Size
- Profitable ? Increase by minimal increment
- Not profitable ? Go back a step

Rinse and repeat.

Anek
 
<i>"you need only 3 lots to reduce stress, take first one at +2 ticks = reduce stress by half, take second one at 4 ticks = reduce stress to zero, put stop loss at 5 ticks for third lot and trail."</i>

Stress piles up if win/loss ratio is less than 50% and stop-out on a 3 contract position hits max loss greater than -5 ticks.

What is the average gain on +2 / +5 / -5 or ?? divided by three versus initial stoploss? What is the long-term win/loss ratio?

Unless those other variables are in place, scaled out tactic like this is nothing but a feel-good ride to broke.
 
u were talking about jumping from 1 to 10 contracts, i'd assume the account is the same size or else wut is the point? taking 10x the risk is not the same, in your example that would be a 5000 dollar loss instead of 500 on ur 25k account.

Quote from aeliodon:

Taking a $500 loss on a 25k account is the same as taking a $50 loss on a 2.5k account. The key thing is waiting for the lowest risk trades - nail the entry, take a decent profit, and be happy with what you have.

I made 350 YM points in the previous 9 sessions - no losing day. But making 1250 in two weeks felt like nothing at all - so I overtraded today and lost 50 YM points. Now had I been up 12,500 in the past two weeks I would have been happy being up 600 today instead of feeling like I was underperfroming and falling into the overtrading trap.
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Austin,

Repectfully, is it easier to determine the outcome of a 1st and down on the 5 yard line or who will win win the Super Bowl as of 8.29.07? Point being very short term events are very predictable and win/loss should be >90% to an experienced, yet undercapitized trader. Experience is the variable that should be discussed here. Not account size. You yourself have posted great results with<$5,000 account size. Thousands of hours of screentime is the key distinction I would guess. Just a thought....


Quote from austinp:

<i>"you need only 3 lots to reduce stress, take first one at +2 ticks = reduce stress by half, take second one at 4 ticks = reduce stress to zero, put stop loss at 5 ticks for third lot and trail."</i>

Stress piles up if win/loss ratio is less than 50% and stop-out on a 3 contract position hits max loss greater than -5 ticks.

What is the average gain on +2 / +5 / -5 or ?? divided by three versus initial stoploss? What is the long-term win/loss ratio?

Unless those other variables are in place, scaled out tactic like this is nothing but a feel-good ride to broke.
More...
 
Quote from bsparkyman:

Austin,

Repectfully, is it easier to determine the outcome of a 1st and down on the 5 yard line or who will win win the Super Bowl as of 8.29.07? Point being very short term events are very predictable and win/loss should be >90% to an experienced, yet undercapitized trader. Experience is the variable that should be discussed here. Not account size. You yourself have posted great results with<$5,000 account size. Thousands of hours of screentime is the key distinction I would guess. Just a thought....
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Short term events in my opinion are easier to predict. but,

Nobody hitting 90% is under capitalized.
Also there shouldn't be ANY under capitalized experienced traders. If you are under capitalized than while you might have a lot of experience, it couldn't have been very good.

Alieodon (sp?) Your math on returns is wrong. If you are using futures I would think you would calculate returns off of margin not nominal contract value.

Stepping up size can be great to combat over trading. Start small. I started trading 2 lots and I am up to 10 lots in ~ 3 years. I have been what most on ET would consider very successful.
 
Quote from aeliodon:


Yet when you're trading one lot - averaging 10 YM points or 1 ES point a day feels like shit because its only $50/day.
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IMO it should feel pretty much the same to make $50 trading 1 lots as it does to make $5000 trading 100 lots. Think in ticks/points, not in dollars.
 
"However - I feel it is nearly impossible to make decent money or even appreciate decent performance when you're trading 1 lot."

however, how you FEEL is not consistent with how trading and traders minds work.

i have mentored many futures traders, and i can tell you it is an exceptionally rare trader that would not feel VERY stressed with 10 lots without a LOT of experience. and stress leads to emotional trading, revenge trading, poor decisionmaking, etc.

it is also factually incorrect to say you can't get decent performance with one lot.

i'm not saying you are going to make a good living doing 1 lot, but no inexperienced trader should ever start out trading having to make a living from it.

the VAST majority of traders are well served with starting out 1 to 2 lots (imo after papertrading and/or trading DIA as a YM proxy for several months) and not exceeding 2 lots for AT LEAST another 6 months to a year. at least

better to have a 20k account and trade 2 lots, and put your other money in other stuff NOT FUTURES, than start trading 10 lots

that's absurd and nobody who is responsible would recommend 10 lots to a beginner

a 10 pt dow stop with one contract is $55 of risk (assuming $5 round trip and no slippage (i rarely get slippage, but assume two ticks slippage in a bad market, that's $65 of risk)

most beginning traders can trade that comfortable.

if you play high probability plays, there is no reason why you can't make 20 YM pts a day, which is a nice $100 for one contract, which is quite doable.

that's not gonna make you rich, but it's a good start in learning how to trade.


and assume 3 losses in a row with a 10 pt stop AND slippage, you are looking at under $200 of loss for the day, which is not gonna break you or emotionally disturb most traders

you are ultimately trading against yourself and trading 10 lots is an absurd recommendation for anybody but a seasoned trader
 
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