Trading 1 contract vs multiple contracts is... - futures io
futures io



Trading 1 contract vs multiple contracts is...


Discussion in Psychology and Money Management

Updated
      Top Posters
    1. looks_one treydog999 with 2 posts (3 thanks)
    2. looks_two Big Mike with 1 posts (0 thanks)
    3. looks_3 trendisyourfriend with 1 posts (1 thanks)
    4. looks_4 tulanch with 1 posts (0 thanks)
      Best Posters
    1. looks_one GFIs1 with 2 thanks per post
    2. looks_two treydog999 with 1.5 thanks per post
    3. looks_3 trendisyourfriend with 1 thanks per post
    4. looks_4 MWinfrey with 1 thanks per post
    1. trending_up 2,571 views
    2. thumb_up 8 thanks given
    3. group 7 followers
    1. forum 8 posts
    2. attach_file 0 attachments




Welcome to futures io: the largest futures trading community on the planet, with well over 125,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

 
Search this Thread
 

Trading 1 contract vs multiple contracts is...

(login for full post details)
  #1 (permalink)
 Big Mike 
Site Administrator
Swing Trader
Data Scientist & DevOps
Manta, Ecuador
 
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
 
Big Mike's Avatar
 
Posts: 50,079 since Jun 2009
Thanks: 32,543 given, 98,520 received

Vote and discuss.

Trading 1 contract vs multiple

Total votes: 258
 


Mike

We're here to help -- just ask

For the best trading education, watch our webinars
Searching for trading reviews? Review this list

Follow us on Twitter, YouTube, and Facebook

Support our community as an Elite Member:
https://futures.io/elite/

Visit other sites? Please spread the word about your experience with our community!
Follow me on Twitter Visit my futures io Trade Journal Started this thread Reply With Quote

Can you help answer these questions
from other members on futures io?
Denali Data?
Sierra Chart
Need help with strategy PriceActionSwingPro
NinjaTrader
AutoTrendHforRad indicator in a strategy "direction …
NinjaTrader
Is there a way to rename an existing trade?
MultiCharts
need help writing easylanguage radarscreen weekly perfor …
EasyLanguage Programming
 
Best Threads (Most Thanked)
in the last 7 days on futures io
Spoo-nalysis ES e-mini futures S&P 500
69 thanks
I finally blew up an account
58 thanks
The Crude Dude Oil Trading System
39 thanks
FIO Journal Challenge - April 2021 w/Jigsaw Trading
38 thanks
The tiyfTradePlanFactory indicator
25 thanks
 
(login for full post details)
  #3 (permalink)
 GFIs1 
Legendary Market Wizard
Switzerland
 
Experience: Intermediate
Platform: Investor/RT
Broker: IB / DTN
Trading: Futures
 
Posts: 5,448 since Feb 2012
Thanks: 5,328 given, 11,417 received


The answer is - 1 contract to trade is HARDER

because there is no chance for
a) scaling in or
b) scaling out

As long as you are trading without any scaling(s) in/out there is NO difference of course.

GFIs1

Follow me on Twitter Visit my futures io Trade Journal Reply With Quote
The following 2 users say Thank You to GFIs1 for this post:
 
(login for full post details)
  #4 (permalink)
 treydog999 
seoul, Korea
 
Experience: Intermediate
Platform: Multicharts
Broker: CQG, DTN IQfeed
Trading: YM 6E
 
treydog999's Avatar
 
Posts: 896 since Jul 2012
Thanks: 291 given, 1,028 received

i think it actually is a psychological aspect of trading. Based on my coin flip studies all in - all out vs scale out, over a large sample size (40k+ samples) all in all out wins out mathematically. So technically multiple contracts and 1 lot should be the same using the optimal trade management scheme of AIAO fixed stops and targets. However scaling out is suboptimal, it is good for the traders psychology, this is IMHO the only reason I can see to use a suboptimal management strategy. In which case then multiple lots becomes easier. So it comes down to 1 real question that every trader has to ask themselves.

Do I want the mathematically optimal solution or the psychologically optimal solution? Which is more important to me?

Reply With Quote
The following 2 users say Thank You to treydog999 for this post:
 
(login for full post details)
  #5 (permalink)
 trendisyourfriend 
Legendary Market Wizard
Quebec
 
Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker: AMP/CQG
Trading: ES, NQ, YM
 
trendisyourfriend's Avatar
 
Posts: 4,037 since Oct 2009
Thanks: 3,697 given, 5,221 received


treydog999 View Post
i think it actually is a psychological aspect of trading. Based on my coin flip studies all in - all out vs scale out, over a large sample size (40k+ samples) all in all out wins out mathematically. So technically multiple contracts and 1 lot should be the same using the optimal trade management scheme of AIAO fixed stops and targets. However scaling out is suboptimal, it is good for the traders psychology, this is IMHO the only reason I can see to use a suboptimal management strategy. In which case then multiple lots becomes easier. So it comes down to 1 real question that every trader has to ask themselves.

Do I want the mathematically optimal solution or the psychologically optimal solution? Which is more important to me?

How did you proceed with your coin flip experiement. What was the risk/reward? The good point in favor of scaling out is that you can be more risky or take sub optimal setup and still be a winner over time while using an AIAO approach you need to be more selective. As a corrolary should we ever move our stop loss to BE or should we wait for either our stop loss or target to be hit and never touch them once in a trade?

Reply With Quote
The following user says Thank You to trendisyourfriend for this post:
 
(login for full post details)
  #6 (permalink)
 treydog999 
seoul, Korea
 
Experience: Intermediate
Platform: Multicharts
Broker: CQG, DTN IQfeed
Trading: YM 6E
 
treydog999's Avatar
 
Posts: 896 since Jul 2012
Thanks: 291 given, 1,028 received


trendisyourfriend View Post
How did you proceed with your coin flip experiement. What was the risk/reward? The good point in favor of scaling out is that you can be more risky or take sub optimal setup and still be a winner over time while using an AIAO approach you need to be more selective. As a corrolary should we ever move our stop loss to BE or should we wait for either our stop loss or target to be hit and never touch them once in a trade?


Here is the link to the post I am referring to:


Reply With Quote
The following user says Thank You to treydog999 for this post:
 
(login for full post details)
  #7 (permalink)
 MWinfrey 
Lubbock TX
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Stage 5 Trading
Trading: CL
 
MWinfrey's Avatar
 
Posts: 1,880 since Jul 2009
Thanks: 1,450 given, 3,325 received

Because I have proven to myself that trading AIAO is more profitable over the long term, there isn't any real technical difference between 1 contract and multiples.

Reply With Quote
The following user says Thank You to MWinfrey for this post:
 
(login for full post details)
  #8 (permalink)
 tulanch 
Salt Lake City, UT
 
Experience: Intermediate
Platform: SC, NT, MT
Broker: AMP
Trading: NQ ES YM Bonds
 
Posts: 250 since Mar 2010
Thanks: 49 given, 369 received

define hard

trading is not easy period, if it was 95% would be successful

I think it therefore boils down to you and your plan

do you/can you trade all in all out, or do you/can you trade using a scale based plan

Reply With Quote
 
(login for full post details)
  #9 (permalink)
 lsubeano 
hollywood
 
Experience: Intermediate
Platform: thinkorswim
Broker: TD
Trading: futures
 
lsubeano's Avatar
 
Posts: 213 since Jun 2010
Thanks: 65 given, 165 received

a couple thoughts come to mind....

if a trader is trading all in and all out, it doesn't matter how many contracts you trade, b/c that suits your style..

if a trader scales out positions....then obviously its not going to work in favor of 1 contract traders

if a trader scales in positions.....same as above...

...but this rings in another question.


What is better? do ppl think that say trading 3 contracts (or units) is better than 1 because you can ride a trend and lock in profits?

for someone just starting...is it better to just trade 1 contract to limit losses?

I've been thinking about this recently....I remember a trader mentioning that at his place of work trading CL, they're not allowed to trade 2 contracts until they make $10,000 in a month trading only 1 contract....whether true or not....it can be done...

Follow me on Twitter Reply With Quote
The following user says Thank You to lsubeano for this post:


futures io Trading Community Psychology and Money Management > Trading 1 contract vs multiple contracts is...


Last Updated on April 29, 2013


Upcoming Webinars and Events
 

NinjaTrader Indicator Challenge!

Ongoing

HIRO Indicator by Spotgamma in Bookmap w/Brent Kochuba @ SpotGamma

Elite only

NEW BlackBird Features + FOREX Support w/Jeremy Tang @ SharkIndicators

Elite only
     



Copyright © 2021 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada), info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts