Problem with trading 1 contract only

[NoDoji]

Trading multiple contracts all in/all out is the same as trading 1 contract. I tried several scaling strategies in the past and I didn't have the mindset for it, so I stuck with all in/all out, meaning I had a choice of holding through retraces for larger targets (major S/R levels in trends and very wide ranges) or taking smaller profits and more of them. In the long run it didn't matter because I either had more small profits or less large profits. So I went with the style that fits my trading personality which is taking small profits unless the price environment (context) tells me there is a strong likelihood of a larger target being reached.

For example, if I'm positioned short in a narrow range following a strong price drop, the low of the narrow range breaks and a measured move (another drop down equal to the previous drop down) is expected, I will hold for the measured move instead of taking the smaller target.

If, however, I'm trading in a channeling trend, I'll take a small profit and wait for the pullback in the channel to re-enter. If it's a wide channeling trend, I'll take small profits in both directions.

These are strictly all in/all out strategies because I've never developed a scaling strategy that works for me. A fellow trader from ET once provided me with his scaling strategy in immense fully illustrated detail and it absolutely rocks and I can't bring myself to trade it in real time.

 

[loyek590]

otherwise, if you are having trouble trading just one ES and that is all the money you have, and you want to experiment with size, put on that es vs ym spread. You can put it on for peanuts. It creates a micro es.

 

[Handle123]

Right now I am still in the learning boat of trading futures consistently and successfully.

My question to you guys is how do you manage trading 1 contract?

For example, let's say your short 1 ES contract. You see ES coming into a support level, that you know the markets will react to but you still have a target level that is further away.

Do you just get out and take profit at the first level? And reshort at any bounce the market gives you? Or do you stubbornly hold onto that 1 contract position until it reaches your target?

Obviously with ETF's/stocks or larger contracts, I can sell 1/3 of my position on a small target level, and hold the rest until it reaches the level you have set.

Really comes down to your Trading Plan and your back testing. There are trade offs whether you have targets or not, losing percentages have to be small when you are a Scalper cause you doing much more trading than someone who takes handful of trades for day trading and their losing percentages are usually much higher but is offset by larger gains, so often times it comes down to how you view the market, if you believe the market has many periods of inefficiencies then you want to stay in trades less minutes, if you believe in concept the trend is your friend you will stay in longer. I scalp ES mainly, so I use targets and get out of 99-100% of my position, only in trade up to 3.5 minutes, might take 20 trades in an hour, but I only trade an hour in ES. I don't use risk to reward concepts cause I don't use stops, I use time concepts like an hourglass with sand, as time goes by, risk goes up if trade does not go in direction of trade. But other flip of the coin, I trade long term futures and just reversed recently a 4.5 year trade, had rollovers of course, and don't use trailing stops when trading long term as I actually believe in long term trends but in one minute bars, much less.

There is no right or wrong, comes down to your personality and making money, period, but your Trading Plan better have an answer for any question that will come up. And I don't recommend not using stops or averaging down as I do, but when you account can handle more volume AND you have several years experience, you no longer trading a one lot.

Hey, everyone it is Friday, YAHOOOO.

 

[speedo]

I trade all in, all out with a target based on the statistical sweet spot of maximum favorable excursion data in my market (ES). As gains out number and are larger than losses, it works for me. No trader has the same exact trade plan, you have to find what works for you. As noted, it matters not whether I am trading one contract or 30.

 

[sponge]

I trade all in, all out with a target based on the statistical sweet spot of maximum favorable excursion data in my market (ES). As gains out number and are larger than losses, it works for me. No trader has the same exact trade plan, you have to find what works for you. As noted, it matters not whether I am trading one contract or 30.

Do you mind me asking what you have found to be the statistical sweet spot of MFE in the ES? And how often does that sweet spot change?

 

[speedo]

Do you mind me asking what you have found to be the statistical sweet spot of MFE in the ES? And how often does that sweet spot change?

I don't change it as it works over time and I like to keep things simple. My target is 10 ticks and my stop is never over 8 and averages around 6 1/2. I get about 30 signals a week. I have tried optimizing over the years but it always ends up more trouble that it is worth in trade management.

 

[zbestoch]

Really comes down to your Trading Plan and your back testing.

I have read the words "trading plan" and "back testing" here at ET more times in just a few months than I had in all my other years combined. I'm a believer in having a trading plan (I have multiple, in fact - one for every set up and instrument I trade). I am a strong believer in back testing. For all the "play" that trading plans and back testing get here at ET, there is strong evidence that most trade without the benefit of either.

 

[Handle123]

I have read the words "trading plan" and "back testing" here at ET more times in just a few months than I had in all my other years combined. I'm a believer in having a trading plan (I have multiple, in fact - one for every set up and instrument I trade). I am a strong believer in back testing. For all the "play" that trading plans and back testing get here at ET, there is strong evidence that most trade without the benefit of either.

I agree, trading really is in the hardest ways, you get what you put in. I use to think 300 sample size was huge, then minimum is 3,000 and of late 20,000 plus, more you know what it done in past will give me 99% expectations, that not to say I can't lose more cause of that 1%, but at least I can have added increases in volume based on drawdowns. I once had 23 losing trades in a row but I knew what I could expect and lost 21% of my account and very next trade was coffee and made it all up and then some, am sure many others would have stopped long before scrapping the method, which I still trade but have added extra rules to make better.

 

[Visaria]

Trading only 1 contract size is 2 dimensional trading. You need to be able to trade different position sizes for different situations.

 

[Scataphagos]

That is horrible advice. I was going write almost, but ALL of the big traders that I know in Chicago trade spreads or one kind or another. I'm sure there are some big trend followers out there somewhere. I don't know any.

Do you really believe that Jump, DRW, Citadel or Ronin make the majority of their profits off of outright directional trading?

I don't know about that. But "institutional money management" is all about "making a little bit of money (enough) to satisfy clients so that you can keep your job and continue earning fees". Part of that is being overly cautious about avoiding drawdowns.

I've made >100% return in a year on my total portfolio (and for clients when I had them... years ago I ran a mutual fund timing service) 4-times in my career. I've made >40% in a year enough times that I stopped counting. Those kind of returns are almost impossible if hedged/market neutral.

Like I said. You've got to be prepared to make an unhedged sizable play, then stop out of wrong. Rinse and repeat. K.I.S.S.