how do i go from trading 50 shares of SPY to ES futures?

E

edward22245

I will start by trading 50 shares of SPY (and trade 50, 100, 200, 300, 400 then 1 contract of ES futures, etc).

How would I increase my position size gradually until I max out (1 contract per 5-10k)?

Given I trade the first two hours and I do about 1-3 trades per day, how many (net profitable) trades should I do per size? 10? 20?

Thanks!

PS Alexander Elder recommends you increase your size by one unit every time you have two profitable weeks in a row, and cut down your size by one unit after every losing week - but I feel that would be too slow since a single losing week can set me back a whole month.
 
As of this moment, SPY is priced at $279.40 per share. So I'm assuming you have $13,970 to flip 50 shares of SPY.

So let's assume you have $12,500..

ES is $12.50 per tick, and you want to trade 1 contract. With 1 contract you will have 1000 ticks to risk before you lose all your money ($12,500/12.50).

With 1 contract, if you can net 1000 ticks, then you will turn your $12500 into $25,000, suggest now you trade 2 contracts.

With 2 contracts, do the same thing you did with 1 contract, net another 1000 ticks, and you will have $50,000, suggest then you trade 4 contracts.

With 4 contracts, do the same thing you did with 2, net another 1000 ticks, and you will have $100,000, now trade 8 contracts.

Repeat this until you reach your personal comfort level.

If you have never traded, perhaps day trade ES in a demo account until your system (3 trades per day) produces 1000 ticks of profit.. then get started with your money.

I don't know who Alex Elder is, but I don't think his advice is meant for Futures contracts.

This is all just one man's suggestion. Many other ways to proceed. Good luck.
 
edward22245 said:
I will start by trading 50 shares of SPY (and trade 50, 100, 200, 300, 400 then 1 contract of ES futures, etc).

How would I increase my position size gradually until I max out (1 contract per 5-10k)?

Given I trade the first two hours and I do about 1-3 trades per day, how many (net profitable) trades should I do per size? 10? 20?

Thanks!

PS Alexander Elder recommends you increase your size by one unit every time you have two profitable weeks in a row, and cut down your size by one unit after every losing week - but I feel that would be too slow since a single losing week can set me back a whole month.
More...

Won't you need $25k account equity to day trade SPY? So I am assuming this is not a case of some newbie wanting to max out their trade size.

I have a lot of time for Alex Elder. That said, I am not sure I follow the concept of adding "units." You are doubling your trade size, which seems like a lot. Of course, it depends on your account size.

If you are a newbie, I would try to book several months of profit before increasing size at all. I would probably advise you to limit it to one trade a day as well.
 
edward22245 said:
PS Alexander Elder recommends you increase your size by one unit every time you have two profitable weeks in a row, and cut down your size by one unit after every losing week - but I feel that would be too slow since a single losing week can set me back a whole month.
More...

Elder’s sizing plan is a very wise one. Getting from SPY to ES is the wrong mindset IMO - you’re asking the best route from Paris to Lisbon whilst ignoring your mode of transport.

Finding consistency is your only concern. And it’s a much bigger and more immediate challenge for you than daydreaming about jumping from stocks to futures. Which means very good trade management and uncommon self discipline.

I wish you good fortune!
 
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