Would it be easier to attempt 4pts with 5 contracts or 10 pts with 2 contracts trading the NQ?

[Xela]

Theoretically speaking, considering an ideal daily target of $400, do you think it would be better to attempt 4point with 5 contracts or 10 points with 2 contracts?

The guys above, saying "Your question sounds stupid to me" and "Your question is the TOTAL OPPOSITE of what you should be asking" have it exactly right.

"Plain speaking", maybe ... but exactly right.

I know that this is a dumb question so feel free to insult me if you like

That's very broad-shouldered of you. But they already did (well, maybe) so I'll welcome you to the ET forum, instead. And then try to explain something ...

Here's the thing: the number of contracts you trade ("position-sizing") needs to be determined from other parameters (your trading-plan, the chart, the volatility, the type of entry, your risk-management parameters, how far all those things dictate that your target should be, and so on and so forth), not taken as a starting-point with other parameters subsequently being determined from it. So truly, you have the cart in front of the horse.

I trade NQ every day, and how many points (or ticks) I'm aiming to take from each trade varies, according to the type of entry and the volatility and what the market does, each day. I certainly don't sit down to trade each morning intending to take any fixed amount of money: I sit down intending to follow my trading plan, see what happens, avoid drawdowns and make damn sure I can sit down again the next day and do the same thing.

And personally, I'd advise you against having a "target of $400 per day". The minimum "average target-period" should be a month. I don't think it's necessarily unreasonable to have an "average expectation of $8,400 per month" (that's arithmetically the same, near enough), though I don't do it myself. But it's hard to see much sense in a "daily target": it's a bad way of looking at it, and it may encourage you trade every day whether the chart suits your entry-parameters or not (which can't be wise?) and it may also mean that on a day when you could have taken $1,000 or $1,200, you've stopped after the first $400. I would re-think this completely, if I were you.

I would need (theoretically) to wait for very few high probability set ups while attempting 10 points per days would require more trades, and it would expose me to more potentially losses. Not sure this makes any sense.

It does ... to you (and I can see what you mean by it, too, to be honest). And that's why you have the problem!

Do you have a trading plan with a valid, proven, genuine edge?

 

[ftrexx1]

You are asking the wrong questions. And you are hypothesizing with the wrong side of the equation.

Plus, according to you, whats the point of trading at all when NQ does not have AT LEAST a 20 point linear range?

Getting 10 points/days would require more that one trade.

 

[Overnight]

Getting 10 points/days would require more that one trade.

Not true. With NQ it can happen with one trade in 5 seconds, or it can take hours. But it can be done. Mostly luck there. Of course it cannot be done consistently.

As to the basic question the OP posed...It is always going to be easier going for 10 points on 2 contracts rather than 4 points with 5 contracts.

Want to see why? Do it live on any given RTH day outside of NYC lunch hours. See how you feel watching it. Your system is going to totally fail as you totally fail your system emotionally.

 

[wrbtrader]

Thanks for your replay.
The biggest issue I have now is that the more I trade the biggest the losses. I'll try to better articulate. If I make 50 round trips/day, I would probably end the day with losses because it is very difficult for me to spot 50 good set ups per day. I feel more comfortable in waiting for few high probability opportunities.

Your backtested results should be able to answer these questions for you...

4 points / 5 contracts versus 10 points / 2 contracts

In addition, your backtest results should tell you what type of market conditions that are needed to be present for either of the above to occur. You'll then know when to trade and when not to trade based upon the market conditions.

Seriously, if you knew when both tend to occur...you could then do both. Knowing when to do the 4/5 and knowing when to do the 10/2.

I'm just thinking outside the box and assuming you have adequate backtesting info to exploit.

wrbtrader

 

[jl1575]

Work really really hard and smart, with some luck, to develop systems that were done tons of back tested and real time tested and can handle any chop, spike, and boring period of time and win handsomely and surely, then you have a chance to make money consistently. I believe you can stack up to 50 lots without much constraint, and even more in ES.

 

[Overnight]

Go ahead, right now on June NQ in live. It is sitting at 6688.5, wait, it is 90.0 now....Wait, it is now 88.65...Wait, it is...See the problem here?

You're going to get whipsawed so bad your momma' won't even recognize you.

Focus on the market and understand it. Realize what it is, and what it can do to you. The only way to tame her is to know her.

By the way, in sim I went short at 6686.00 with 5 contracts a bit ago. Let's see what happens. With a 10 point stop, 6 point target. Watch this nonsense...

 

[Overnight]

And there you have it. Stop hit, account would be down 1000 bux. Enjoy your trek into why assuming certain stops and profit targets are going to work on NQ. If you had only 2 contracts on? Maybe your stop would have been father out? Do you see the problem here?

 

[Overnight]

So now I am going to put a single contract on Sep NQ long. Let's see what happens. Sim of course. Entry is at 6724.00

 

[ET180]

Figure out a good entry strategy first and then worry about the target / exit strategy later.

 

[heavenskrow]

Thanks for your replay.
The biggest issue I have now is that the more I trade the biggest the losses. I'll try to better articulate. If I make 50 round trips/day, I would probably end the day with losses because it is very difficult for me to spot 50 good set ups per day. I feel more comfortable in waiting for few high probability opportunities.

then just do 50 roundstrips of reverse trades, so if you think you wanna buy do the opposite. and if you want to sell , buy...