When to take size up?

F

fatrat

3 of the past 4 weeks have been profitable for me. One week, I had some kind of mental fart and screwed it up, but I've returned to normal.

However, I've been trading only 100 shares at a time. If this week is profitable, I'm thinking about trying 200 shares at a time.

What general rules do you guys use for taking up size? What difficulties did you encounter? How long do you wait for consistency before you take up the size?

I have a feeling trading with 200 won't be terrible, but I'm cautious about it nonetheless.
 
Quote from fatrat:

I have a feeling trading with 200 won't be terrible, but I'm cautious about it nonetheless.
More...

You have to look at it from the market's point of view. Unless you are trading extremely thin markets, what difference does another 100 shares make. The faster you start to not care about the size of your position the better you can just trade your plan without distraction.
 
Quote from illiquid:

You have to look at it from the market's point of view. Unless you are trading extremely thin markets, what difference does another 100 shares make. The faster you start to not care about the size of your position the better you can just trade your plan without distraction.
More...

Easy illiquid, his account might not be able to withstand losses from 200-500 shares trades, his commitment to a bigger sizer trade may suddently change due to psychological pressures and fears of loosing more might force him to make the wrong decisions.

It might be better to gain enough consistency and comfort with 100 and let the account growing power decide.

But if he thinks he is good enough he could try with 200, give margins time to adjust and after a while increase again.

A couple of cents
P
 
Try adding size when you feel really good about the trade (without adding to a losing trade). Just be sure to get out quickly if it goes against you.
 
Sure, position size should be reasonably proportional to account size, time frame, stops, slippage etc. If you need to double your account size before you go to 200 shares for you to feel comfortable, then do it that way. However, the most likely risk if you're asking this question is that what you think has been your edge so far isn't actually there, which calls for going slow ("brain farting" etc).

But if you're just getting butterflies on trading larger size, the attitude that the market doesn't really care how big you are (in most cases) is a way to let go of that P/L column (which is what all the butterflies are about after all) and maintain objectivity. You don't want to get into the habit of closing positions prematurely just because you're used to a certain dollar amount of profit previously trading a smaller size.
 
Well, I figured out what my edge was. It was just that I had a personality problem where I'd be so anxious to make money back after a loss that I'd do stupid things. When I started to control myself and wait again for another setup, I started doing well.

I had the same problem today, but I stopped when I caught myself acting irrationally. I guess some would call it "revenge trading." It used to be a huge problem with me. It still is, but now I catch myself doing it and I stop.

I'm running 5 days in a row with profit right now. My last losing day was last Monday, and that was because I didn't stop myself from revenge trading.

Stupid, I know. But it really was a problem for me for quite some time.

Quote from illiquid:

Sure, position size should be reasonably proportional to account size, time frame, stops, slippage etc. If you need to double your account size before you go to 200 shares for you to feel comfortable, then do it that way. However, the most likely risk if you're asking this question is that what you think has been your edge so far isn't actually there, which calls for going slow ("brain farting" etc).

But if you're just getting butterflies on trading larger size, the attitude that the market doesn't really care how big you are (in most cases) is a way to let go of that P/L column (which is what all the butterflies are about after all) and maintain objectivity. You don't want to get into the habit of closing positions prematurely just because you're used to a certain dollar amount of profit previously trading a smaller size.
More...
 
It is what it is, no more no less. If you can make money in the market by sitting on long position, I'll do that too.

Later,

MyOwnBoss
 
You must log in or register to reply here.
Back
Top