I'm a profitable trader but I need some help.

A

athlonmank8

Im solidly profitable.

With that said i'd like to begin with the stats.

I'm averaging 2.4% per week on a systematic trading style i've developed for the S&P.

Over the past two weeks i've had 1 down day and am trading at about 74% accuracy on 200+ trades in that given time.

I made this thread because I now know I can go into the market on any given day and make money with confidence. 8 years it's taken me to get this feeling of success.

Now here's the problem..... that 2.4% only amounts to roughly $150 which is almost nothing.

My question is when did you start increasing position size based on account size? I need to open things up a bit but was just curious how people have gone about doing this without having an emotional impact.
 
Quote from athlonmank8:

Im solidly profitable.

With that said i'd like to begin with the stats.

I'm averaging 2.4% per week on a systematic trading style i've developed for the S&P.

Over the past two weeks i've had 1 down day and am trading at about 74% accuracy on 200+ trades in that given time.

I made this thread because I now know I can go into the market on any given day and make money with confidence. 8 years it's taken me to get this feeling of success.

Now here's the problem..... that 2.4% only amounts to roughly $150 which is almost nothing.

My question is when did you start increasing position size based on account size? I need to open things up a bit but was just curious how people have gone about doing this without having an emotional impact.
More...

I'm a strong believer in position size management and it has helped me tremendously in increasing my profit level.

First of all, the market is not the same each trading day and often not the same through out the trading day from one trade to the next trade.

Yet, most traders use the exact same position size as if the market is the same.

Here's a simple example of using position size management to increase your profits just in case those reading this do not understand.

Lets say your stats show that your winning percentage between 0930am - 11am is 87% while your only 64% winning percentage between 11am - 1:30pm...

That piece of info should tell you when to increase your position size and when to leave your position size at normal.

Further, if there's a time zone when your below 50%...that's a time zone you should be reducing your position size or staying on the sidelines.

Now here's a more complex example.

Lets say your more profitable during rising volatility market conditions and less profitable during declining volatility market conditions...

You can increase your size during rising volatility and decrease your size during declining volatility.

Here's another example...

Lets say there's a particular time in the year that the market on average moves one particular duration by 25 ES points.

It should be obvious when you should be increasing your position size in comparison to other times of the year.

Also, I'm intentionally being brief with the above examples to keep this from being a long winded post.

With that said, regardless to your position size increases...

Never violate whatever risk management rules your using.

For example, lets say you can trade no more than 10 contracts without violating your risk management rules.

Never exceed those 10 contracts no matter how high probable of a trade it will be to maintain good discipline as your risk exposure changes from one trade to the next trade or from one trading day to the next trading day.

Therefore, because the market is not the same each trading day...

That implies our risk exposure is not the same each trading day and position size management is a tool/technique to better manage those changes in risk.

Just another example why there are many edges that has nothing to do with the entry signal itself and it can be quantified if you maintained a detailed record of your trades in different types of market conditions.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
In addition to Mark's excellent post on using variable position sizing according to measurable market conditions, you need to seriously increase the leverage of the instrument you are trading if you hope to achieve any of the outsize gains which would make all of the time that you've spent at this game worthwhile.

In other words, you've designed a consistently profitable system which is based on the S&P500 indice, translate that system to the S&P emini's so that you can get the most bang for your dollar.

Good trading,

JJ
 
Quote from NihabaAshi:

I'm a strong believer in position size management and it has helped me tremendously in increasing my profit level.

First of all, the market is not the same each trading day and often not the same through out the trading day from one trade to the next trade.

Yet, most traders use the exact same position size as if the market is the same.

Here's a simple example of using position size management to increase your profits just in case those reading this do not understand.

Lets say your stats show that your winning percentage between 0930am - 11am is 87% while your only 64% winning percentage between 11am - 1:30pm...

That piece of info should tell you when to increase your position size and when to leave your position size at normal.

Further, if there's a time zone when your below 50%...that's a time zone you should be reducing your position size or staying on the sidelines.

Now here's a more complex example.

Lets say your more profitable during rising volatility market conditions and less profitable during declining volatility market conditions...

You can increase your size during rising volatility and decrease your size during declining volatility.

Here's another example...

Lets say there's a particular time in the year that the market on average moves one particular duration by 25 ES points.

It should be obvious when you should be increasing your position size in comparison to other times of the year.

Also, I'm intentionally being brief with the above examples to keep this from being a long winded post.

With that said, regardless to your position size increases...

Never violate whatever risk management rules your using.

For example, lets say you can trade no more than 10 contracts without violating your risk management rules.

Never exceed those 10 contracts no matter how high probable of a trade it will be to maintain good discipline as your risk exposure changes from one trade to the next trade or from one trading day to the next trading day.

Therefore, because the market is not the same each trading day...

That implies our risk exposure is not the same each trading day and position size management is a tool/technique to better manage those changes in risk.

Just another example why there are many edges that has nothing to do with the entry signal itself and it can be quantified if you maintained a detailed record of your trades in different types of market conditions.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
More...

This is great advice on money management. My question is, how do you keep track of your trading statistics? What software do you use for that? OR do you calculate it manually?
Thx
Dilly323
 
Quote from NihabaAshi:

I'm a strong believer in position size management and it has helped me tremendously in increasing my profit level.

First of all, the market is not the same each trading day and often not the same through out the trading day from one trade to the next trade.

Yet, most traders use the exact same position size as if the market is the same.

Here's a simple example of using position size management to increase your profits just in case those reading this do not understand.

Lets say your stats show that your winning percentage between 0930am - 11am is 87% while your only 64% winning percentage between 11am - 1:30pm...

That piece of info should tell you when to increase your position size and when to leave your position size at normal.

Further, if there's a time zone when your below 50%...that's a time zone you should be reducing your position size or staying on the sidelines.

Now here's a more complex example.

Lets say your more profitable during rising volatility market conditions and less profitable during declining volatility market conditions...

You can increase your size during rising volatility and decrease your size during declining volatility.

Here's another example...

Lets say there's a particular time in the year that the market on average moves one particular duration by 25 ES points.

It should be obvious when you should be increasing your position size in comparison to other times of the year.

Also, I'm intentionally being brief with the above examples to keep this from being a long winded post.

With that said, regardless to your position size increases...

Never violate whatever risk management rules your using.

For example, lets say you can trade no more than 10 contracts without violating your risk management rules.

Never exceed those 10 contracts no matter how high probable of a trade it will be to maintain good discipline as your risk exposure changes from one trade to the next trade or from one trading day to the next trading day.

Therefore, because the market is not the same each trading day...

That implies our risk exposure is not the same each trading day and position size management is a tool/technique to better manage those changes in risk.

Just another example why there are many edges that has nothing to do with the entry signal itself and it can be quantified if you maintained a detailed record of your trades in different types of market conditions.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
More...

Wow. Excellent post. Thank you very much. I appreciate the info.

I've got a great idea on how I can incorporate this.

Thanks again,

Dan
 
Quote from JimmyJam:

In addition to Mark's excellent post on using variable position sizing according to measurable market conditions, you need to seriously increase the leverage of the instrument you are trading if you hope to achieve any of the outsize gains which would make all of the time that you've spent at this game worthwhile.

In other words, you've designed a consistently profitable system which is based on the S&P500 indice, translate that system to the S&P emini's so that you can get the most bang for your dollar.

Good trading,

JJ
More...

Im working on that as we speak. :)

That's one of the problems. Too much leverage has killed me in the past, and Im having a rough time finding middle ground haha.
 
Over the past two weeks i've had 1 down day and am trading at about 74% accuracy on 200+ trades in that given time.

Dear Sir

If risk/reward is 1:1 very rare operator ( 1 from 1000-10000)
can make 60% profitable trades in long row as 1000
600 winning and 400 losing trades .

Monkey would make 500 winning ...
 
Leverage is your friend. 250K is a good start. a 1% return gains you 2500 dollars of profit.

And it is not to difficult to make that that during the week a few times, some days you might only make 200 dollars when some of the stocks in your basket post a loss but you make up for it with the gains in your other stocks.

When I trade, once I make my goal which is .5%-1% I quit for the day, I think its bad luck to keep going etc.. but then again I have my own superstitions. Another thing I do not trade every day.

250K is a good start if you want to make a living out of trading.

I just buy and sell (and of course sell short) stocks, nothing to complicated or fancy (ie options etc.. etc..)
 
'When I trade, once I make my goal which is .5%-1% I quit for the day'

another good money management strategy that increases odds in your favor.
 
Quote from athlonmank8:

Im working on that as we speak. :)

That's one of the problems. Too much leverage has killed me in the past, and Im having a rough time finding middle ground haha.
More...


Dan,

Two things I've found helpful.

One is the answer to the question: what does the market have to be doing to make my method fail or degrade significantly (and can I spot that)?

Two is to get a montecarlo sim and run my results through it looking for risk of ruin.

The first is very helpful but not always enough ... recently the HSI more than doubled its intraday volatility because of a new group of players and blew my tight stop strategy out of the water ... which was not one of the failure modes I'd considered (slippage of 27 points on a 9 point stop is uncomfortable). After two days I was sure that the problem was real and stopped. Having identified the problem and monitored its evolution I am now adjusting back in again. Preparation didn't prevent a temporary failure but did make restoration of service faster.
 
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