Quote from jinxu:
That's basically the same strategy I was suggesting, except that at one contract you don't have the option of scaling out half your position. An issue with trying to make consistent profit is that there's no guarantee that it'll always be like that. Another issue is that $100 per day is not big money. Your cost of living can be higher than that. With a small account you don't have much choice but to try to hit those homeruns when you see one.
On the upside, losing 100 is not a big deal imo. You can make that back working one day at a job.
Let's say in an 8 hour period, you make exactly $100.
$100/8hrs = $12.50/hr.
$100 trading the ES is 2 pts, let's say it takes 20 minutes for your trade to hit your 2 pt target.
60 minutes in 1 hr/20 minutes = 3 20 minute intervals.
$100 (in 20 minutes) x 3 (3 20 minute intervals) = $300/hr. If you were to generate $100 every 20 minutes over the course of a "real working day" you'd effectively make $2400 a day or roughly $624,000/year.
You're working 1/3 of an hour of a full day's work to make $100 in 20 minutes.
You can't make big money unless you're well capitalized. Like I said, consistent profitability of small wins will you get there in time. If you have the mindset that $100 is peanuts, then you will never survive.
If you want to hit that homerun tomorrow you're probably better off going to a local convenience store and playing the lottery because that is basically what you're doing.
If you're consistently profitable and are able to trade 5 contracts per day at 2 pt targets, before commissions, assuming 20 trading days per month, you can make ~$120,000 per year. Throw in a few curveballs with scaling out, letting your other half swing to larger targets and you're talking about some big bucks. I'd enjoy $120k/yr.
The first step is controlling your risk and controlling your mindset.
