How much capital per ES w this strat

W

wiesman02

Before I begin, my question is in regards to account size. Many people say to trade only 2% of your account on any trade. BUt what if you are only placing one trade a day. Should it matter ?

So I’ve developed a system for trading the Open on ES. I plan to devote a seperate futures account to this. In the current volatility the stop averages 8-11 points. The r:r is at a minimum 1:1 and at most 1:1.5. It places on average 4 trades a week no more than 1 trade a day.

Let’s assume smallest lot possible. Based upon a 2.5% risk per trade. You would need $2,000 to trade 1 micro Es. That’s $50 risk $50 reward. If you have positive expectancy, or at the very least 50% hit rate, don’t u think this is excessive ?

$20k to trade 1 ES at $500 stops no more than 4 trades a week ? How much capitol would u deploy ? I left out my exact expectancy bc the system is somewhat discretionary. So if u want to put your own expectancy numbers to help me that would be appreciated.
 
If your R/R is 1:1 and your winrate is 50 % your expectancy is zero prior to commissions, so basically net negative.

A slower trading frequency only means it will take you a longer time to lose money compared with a higher trading frequency.

Since you don't seem to yet have any back-tested hard numbers, I would start with a much lower risk than 2 %. But preferrably, test it first. IMO.
 
I mean what I’m doing has positive expectancy. I’m combining a few things that have worked for me for years in one strategy.
 
wiesman02 said:
I mean what I’m doing has positive expectancy. I’m combining a few things that have worked for me for years in one strategy.
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Retest it after you've "combined those few things" to see if you still have a positive expectancy.

wrbtrader
 
wiesman02 said:
Before I begin, my question is in regards to account size. Many people say to trade only 2% of your account on any trade. BUt what if you are only placing one trade a day. Should it matter ?
More...

Forget the notion of "account size" (unless your account is 100% of your capital).

You should always limit your risk to a small percentage of your CAPITAL on any one trade. (The size of your trading account is irrelevant.. unless it's a large percentage of your capital account.)

Suggest you trade small... until you have convinced yourself that you have "mastered the market's play" (yes, that really is possible). Until you do that... until you've done enough that you KNOW you're expected to win... trade lightly.

Leverage is for later... when you're confident you can handle it.... not just hope you get lucky because you're in a hurry to get rich.
 
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Not nearly enough information for anyone to have a material opinion. Do the work of development and testing and you will have a reasonable answer. A far better one than canvassing random ETers.
 
Scataphagos said:
Forget the notion of "account size" (unless your account is 100% of your capital).

You should always limit your risk to a small percentage of your CAPITAL on any one trade. (The size of your trading account is irrelevant.. unless it's a large percentage of your capital account.)

Suggest you trade small... until you have convinced yourself that you have "mastered the market's play" (yes, that really is possible). Until you do that... until you've done enough that you KNOW you're expected to win... trade lightly.

Leverage is for later... when you're confident you can handle it.... not just hope you get lucky because you're in a hurry to get rich.
More...

Bottom Line... whatever play you make, it should always be "risk limited".
 
Start with a small account as you can handle and can handle your SL size ?? your SL size is your method, reducing that will just get you SL'd more.

Make sure you have say 6 SL hits in a row before you hit margin level ?? don't think in % term.

Then add money as your grow the account, or use your funds to top up losses depending on how it goes ( it's always top up that's a hint )
 
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