Setting max contract and position size on ES trading
- Thread starter th0masq
- Start date
5 ES contracts with 10k and 1k stop loss? Are you suicidal? Do the maths: in you case, a 0.2% drop in the index, which would be caused by nothing but noise, would close you out, meaning that your equity curve would be a steady downward staircase function ending at 0 after two weeks. As my usual recommendation goes to people that haven't done their homework: spend your money on something better, like drugs and prostitution - then at least you will have fun.
Quantwizard...
I don't know how you trade but 5 contracts and losing 4 pts is a lot unless an unexpected rise or fall in ES happens everyday. Even if it happens you would be on the right side half the time.
I'm not new to trading where I will be max 5 contracts upon every entry. That is suicidal. I've developed a system where my returns are ridiculous but my downside is catasphophic. I have 3-4 consecutive winning days where I make anywhere from 300 to 2000 on a given day. Yes, that's right. With 10k account but my downside is once my account gets double, I have the tendency to get big in size and blow up. This is where I need to have a stop loss limit and max contract size position. I don't daytrade and trade every move. I pick one or two entry points per day and trade. Once I make 2+ pts I exit and call it a day.
You can doubt me all you want but I've lost enough money to learn and the past. 2 months have given me a 85% win rate (I don't trade big size anymore.. 1-5 contracts max)
I don't know how you trade but 5 contracts and losing 4 pts is a lot unless an unexpected rise or fall in ES happens everyday. Even if it happens you would be on the right side half the time.
I'm not new to trading where I will be max 5 contracts upon every entry. That is suicidal. I've developed a system where my returns are ridiculous but my downside is catasphophic. I have 3-4 consecutive winning days where I make anywhere from 300 to 2000 on a given day. Yes, that's right. With 10k account but my downside is once my account gets double, I have the tendency to get big in size and blow up. This is where I need to have a stop loss limit and max contract size position. I don't daytrade and trade every move. I pick one or two entry points per day and trade. Once I make 2+ pts I exit and call it a day.
You can doubt me all you want but I've lost enough money to learn and the past. 2 months have given me a 85% win rate (I don't trade big size anymore.. 1-5 contracts max)
So...obviously you need to reduce your position size and increase your share of cash to reduce net leverage, all of which is determined by volatility in your past trading performance...
Yes, exactly; thus the need to set size and max loss parameters to keep myself in check. One would think a trader should be able to do this once you've been trading for a long time...
Calculating VaR, MaxDD etc. are a good start...
AMP and Mirus offer 20 contracts max intraday leverage per $10,000. Obviously depends on how good you are but 5 contracts per 10,000 doesn't seem that out of control, perhaps 3 would be better.
While I agree that it would be nice to set a limit to be liquidated, just in case of computer malfunction or otherwise sh*t hitting the fan, shouldn't you be able to control this with properly placed stops at the defined $1000 max loss?
Yes, it would seem easy but it's that 1 out of 10 times I don't follow or stick to it that kills. That's why I rather have automated stops. You can say all you want but I find it hard to stick to it. That's why I 'm asking for advice
