Not so. Entries are important, but they are only part of the picture. What you do after that is equally important. We have been using scaling techniques for years. It entirely changes the risk profiles into our favours, and where we get stronger momentum on good volume enables us to scale up and down into significantly larger size without pushing risk off the chart.
Micro E-mini Madness (2% per day)
- Thread starter sstheo
- Start date
I like entering long 1 contract (or any min amount I have established as my min..in this case one contract since the discussion is referring to small). Next as it moves 4 to 6 ticks against me I add a second contract. If it then moves an additional 10 ticks away from my previous averaged in position entries I add a third contract. This way I am getting in cheaper and cheaper. Each time my hard stoploss gets adjusted to the outer boundaries. And my exits (profit targets) get adjusted to the inner boundaries or less.
If I am right it will very soon pop back up to at least my first entry. I can then exit with a profit on my latter two entries and BE on my first OR make money on all of them.
If I am wrong I will very soon know it. Then exit all, double or triple up in the correct direction. Once in again price only has to travel a short distance and I have recovered my loss and back in the money again.
This way I don’t have to worry about precise entries. I just need to know the general context. Where the present pressures are ..long..or short..the immediate context..and a good setup in accordance with the stuff just mentioned.
The same thing with 5...5...5..or 10...10...10 contracts. It is the procedure and process I mention above, not the contract size.
Unorthodox..anti-pundit...counterintuitive..but works quite well for me. High win rate too, which I believe in.
I have to be disciplined or it won’t work overall, because when it doesn’t work in any one event (and it has a 20% to 40% chance of not working in any one implementation of the process..i.e. the original averaged down entries not the doubled or tripled up reversed entries after taking a loss) and I am not disciplined, it can be destructive. I like to work the process like a machine. I can look at the money later when I quit for the day.
Most will protest or laugh. LOL.. Doesn’t matter. I am a maverick. I trade different.
If I am right it will very soon pop back up to at least my first entry. I can then exit with a profit on my latter two entries and BE on my first OR make money on all of them.
If I am wrong I will very soon know it. Then exit all, double or triple up in the correct direction. Once in again price only has to travel a short distance and I have recovered my loss and back in the money again.
This way I don’t have to worry about precise entries. I just need to know the general context. Where the present pressures are ..long..or short..the immediate context..and a good setup in accordance with the stuff just mentioned.
The same thing with 5...5...5..or 10...10...10 contracts. It is the procedure and process I mention above, not the contract size.
Unorthodox..anti-pundit...counterintuitive..but works quite well for me. High win rate too, which I believe in.
I have to be disciplined or it won’t work overall, because when it doesn’t work in any one event (and it has a 20% to 40% chance of not working in any one implementation of the process..i.e. the original averaged down entries not the doubled or tripled up reversed entries after taking a loss) and I am not disciplined, it can be destructive. I like to work the process like a machine. I can look at the money later when I quit for the day.
Most will protest or laugh. LOL.. Doesn’t matter. I am a maverick. I trade different.
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Jasper, now that the micros have given me the opportunity to properly scale for the first time ever, I'd like to learn more about this. Can you share more or direct me to resources? I know that FuturesTrader71 did a YouTube video on this topic, for example.
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I can't say that I've seen that, but he is a smart cookie with gobs of experience and a clear understanding of this business from both sides of the table. If he is talking about this stuff then it's a good idea to listen.
As to resources, the best resource I can point you to is Excel.
Make up spread sheets and plug numbers in. My approach is to use theoretical 100 trade samples. I then plug this into actual samples and compare. Having strong performance analytics is the ONLY way of knowing how you are doing.
We use different scaling systems for different market conditions and can move smoothly from one to another as conditions change. For example where markets are compressed, lethargic and participation is below normal levels, we might use small stops, small targets1/2, and take a 5 lot weighted 3:1:1 that way we get risk on our side very quickly and if it clearly won't go we can scratch the rest for a small profit.
On the other hand if participation is high, and we have excellent context, we might move that around with, lets say for illustration that same 5 lots goes out on 2:1:2 and the targets would be on a longer range model rather than the tight ones used in the first scenario.
With 3 lots in a slow range it might come out at 2:1 with not much expectaion of more than a scratch on the third lot and if something more develops then it can be added to if required.
Scaling and implications to risk management is a huge subject and one that professional traders address early in their careers, but most private traders don't ever get their heads around...
Thanks so much. It makes total sense that that volatility is the variable that determines your stops and targets and the scaling parameters right before each trade is put on. I will start looking into this now. As per my plan, I am getting close to having the ability to trade 3 concurrent micro contracts (About $250 to go).
I appreciate your sharing the plan. I can see that discipline is paramount here, but when you go into "machine" mode it can be quite profitable. Congrats.
This exposure you dream of scares me...I guess that's what separates the real traders out of the wood pile.
Most private traders have never previously had the opportunity to properly scale. The micros have opened up a new world of possibilities here.
ES, I don't follow what you mean by the "exposure." Are you talking about publicly posting my results or continually increasing the number of contracts I trade as my account grows, or something else?
You seem to be pushing the max to trade so quickly. I do not want to get in the way and this is just not the way I treat real dollars. This could be a weakness of mine.
I am getting ready to go live with my new system (several times in my life) and things are getting real for me once again. I can only work with myself.
I wish the best for you and do not want you to lose. It is important to me that you succeed as your knowledge exceeds many traders and you are sharing with us on ET. Just be careful and continue to respect every dollar...don't love it...respect it.
You are a mechanic and do your job.
ES
I am getting ready to go live with my new system (several times in my life) and things are getting real for me once again. I can only work with myself.
I wish the best for you and do not want you to lose. It is important to me that you succeed as your knowledge exceeds many traders and you are sharing with us on ET. Just be careful and continue to respect every dollar...don't love it...respect it.
You are a mechanic and do your job.
ES
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