Quote from austinp:
<i>"I wonder how some of the successful traders move from that proverbial 1 contract to trading 10 to 50 or even 100?
By the same token, those of you who are successful in trading futures, why aren't you increasing your size to 10, 50 or 100 contracts?"</i>
<b>Saxon</b>, that should merely be a linear progression over time. Going from 1 to 5 or 10 to 50 contracts simply because risk % in the given account can handle it does not account for the emotional aspect of trading 500% bigger overnight.
If a trader begins with $5,000 account trading 1 ES contract, risking -$100 per trade on a stop, that's -2% risk per trade. Assume said trader has consistent success over time, and adds $95k to the account balance for tomorrow's activity.
Going from 1 contract to 10 contracts keeps %risk exactly the same. However, the mental = emotional conditioning in most (not all) traders would not be equipped to handle 1,000% change in profits and loss.
Most traders would balk at seeing their trade down -$1,000 on a stop-out. Hit three losers in a row for -$100 each with 1 contract one session, no big deal. Hit the same streak tomorrow with 10 contracts for -$3,000 and I can assure you most traders will begin to tilt, which may be the start of a downward spiral unless that condition is identified and rectified.
This is also equally true for mechanical system traders.
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The progression from 1 to 2 to 4 to 6 to 8 to 10... contracts = share size allows any trader time to adjust with different absolute profit and loss amounts. Just because the account balance can handle ten times more size with equal risk overnight does not mean every trader is inwardly prepared to do the same.
