Its not just psychology...you've got to be able to afford being very wrong with positions that size as well, and imo stops aren't the answer for trading too large for one's account. When someone can afford it, they'll be able to use looser stops and be less fearful, and take advantage of potential opportunities better.
Tips on How To Trade Large Size - Getting Used to 5k share scalps?
- Thread starter KCalhoun
- Start date
Your answer lies in your statement below, read it enough times and make the right connections and you'll understand.
well said, thanks! I get it ... now I've just got to overcome the mental blocks.. it's like "writers' block", but traders' block, on risking more. I'm a big fan of risking as little as possible, but "no guts no glory" like they say... easier said than done, after all these years here I am still trading 100-300 share size out of habit, instead of scaling up. need to work on it, make a breakthrough. thanks!
-k
-k
You have to be confident that your making the right trade. If your trade is right for 100 shares, then it is right for 2000. If your not willing to chance the larger amount of shares then you are scared and scared money loses.
You need to stop thinking about it in terms of $ amounts and numbers of shares. Instead, think in terms of cents, and multiples of base trade-units.
Compare:
A. "Ok I've just bought 5000 shares at $30, wow that's $500 every 10 cents, ok it's just gone 3 cents against me, I'm down $150 already, shit"
B. "Ok I"ve just bought 1 unit at $30, it's gone 3 cents against me but it's not near my stop yet and there's good support here, let's see what the S&P futures are doing..."
The more you associate price movements with actually money won and lost, the less effective you will be with your trading. The ideal point is where you don't care at all (in an emotional sense - obviously in a purely rational sense you have to care) what happens to the market price or your positions.
Compare:
A. "Ok I've just bought 5000 shares at $30, wow that's $500 every 10 cents, ok it's just gone 3 cents against me, I'm down $150 already, shit"
B. "Ok I"ve just bought 1 unit at $30, it's gone 3 cents against me but it's not near my stop yet and there's good support here, let's see what the S&P futures are doing..."
The more you associate price movements with actually money won and lost, the less effective you will be with your trading. The ideal point is where you don't care at all (in an emotional sense - obviously in a purely rational sense you have to care) what happens to the market price or your positions.
This whole issue relates to one's confidence in one's trading logic....
As logic is proven....one sizes up....depending of course on the instrument's depth....
If there is an anxiousness about "need to" etc....this strays away from the merits of the logic....
Knowing that one owns "good logic" is paramount....
As logic is proven....one sizes up....depending of course on the instrument's depth....
If there is an anxiousness about "need to" etc....this strays away from the merits of the logic....
Knowing that one owns "good logic" is paramount....
Usually, but not necessarily. Some stocks you can trade in for a 1000 shares but taking 2k would completely change the trade (as a scalper). Of course I'm speaking of thinner stocks. In order to scalp for a profit, you need someone to take the other side of your trade, so knowing liquidity constraints is key.
OP, money (gained or lost) is a byproduct of good or poor trading. Sizing up should come as a direct result of continued success at a certain level. Staying too long at a level, like you are right now, is what makes it hard to push on. If you are having success on 300 shares, you dont just jump to 5k. You need to go to 500 shares, then 800, 1000, 1500 etc
OP, money (gained or lost) is a byproduct of good or poor trading. Sizing up should come as a direct result of continued success at a certain level. Staying too long at a level, like you are right now, is what makes it hard to push on. If you are having success on 300 shares, you dont just jump to 5k. You need to go to 500 shares, then 800, 1000, 1500 etc
That's a good point about staying at a level w/continued success ... need to slowly start doing more, stabilizing success at each level, before moving "up" in size.. agree 100%...
right re liquidity constraints... and as I trade up more size, will need to be more patient using limit orders for fills vs hitting the ask all the time ... 2-3 cents each way slippage isn't a lot on a 300 share trade of a $20 stock, but it adds up for 3k shares ... probably good to get in the habit of limit orders only for stocks doing at least 20k/minute in volume, for decent fills..
and the other strategy I'm using is scaling up as the trade goes in my favor, then trailing a stop midway between positions (closer to inside market though), so I'm 'playing with the house's money' to dynamically scale into a position on size, once I've added to a winning position .. the tighten in the stop as I add more size.
Does anyone have insights on constraints/strategies to add to size once in a trade? Personally I like to put on a test trade, then add to it once and only once it moves in my direction, continuing to add, and tighten trailing stop as it moves, til it's taken out... anyone else do that?
-k
right re liquidity constraints... and as I trade up more size, will need to be more patient using limit orders for fills vs hitting the ask all the time ... 2-3 cents each way slippage isn't a lot on a 300 share trade of a $20 stock, but it adds up for 3k shares ... probably good to get in the habit of limit orders only for stocks doing at least 20k/minute in volume, for decent fills..
and the other strategy I'm using is scaling up as the trade goes in my favor, then trailing a stop midway between positions (closer to inside market though), so I'm 'playing with the house's money' to dynamically scale into a position on size, once I've added to a winning position .. the tighten in the stop as I add more size.
Does anyone have insights on constraints/strategies to add to size once in a trade? Personally I like to put on a test trade, then add to it once and only once it moves in my direction, continuing to add, and tighten trailing stop as it moves, til it's taken out... anyone else do that?
-k