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Trading Size
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Trading Size

  #1 (permalink)
Trading Apprentice
Baltimore, MD
 
Futures Experience: Beginner
Platform: Tradestation
Favorite Futures: S&P 500 Emini
 
oscar2014's Avatar
 
Posts: 3 since Nov 2014
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Trading Size

Good morning Guys,
I need an advice for you, I am starting now to understand the market movement, and mostly I trade the breaks out, it worked pretty good for me, but I just doing 4 to 8 ticks per day, I have no the confidence to keep trading, just get my profit and call it a day. I just starting and just increased my capital to 15k, my question is is OK to use 7 to 8 contracts risking like 5 ticks every trade or like 470$ at the time.... Normally my rule should be, after a loss of 470$ I should stop until next day......
I am asking because some friend recommend me to use as max contract as possible, like 11 or 12 that would be good if I win but terrible in the other side....

Thanks

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  #2 (permalink)
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  #3 (permalink)
Trading Apprentice
Durham, NC
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: Kinetick
Favorite Futures: ES, CL
 
Posts: 48 since Oct 2014
Thanks: 0 given, 20 received


Hi Oscar

Welcome to futures.io (formerly BMT) and to trading!

Most people use a percentage of account size to determine a risk per trade. 0.5-1.0% per trade is common.
They then have a daily max loss and some have a weekly max loss.

That then allows the number of contracts to adjust to fit standard risk level.
This allows you to have multiple trades in a session, which is especially helpful if the 1st trade is a loser.

If you risked 1%/trade with a daily max loss of ~$500.00, you can have a couple of losers and still end up positive on the day.

Here is an online sizing calculator:
Position Sizing Calculator | Emini Addict

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  #4 (permalink)
Elite Member
asheville north carolina USA
 
Futures Experience: Beginner
Platform: ATC trader (OEC white label)
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oscar2014 View Post
Good morning Guys,
I need an advice for you, I am starting now to understand the market movement, and mostly I trade the breaks out, it worked pretty good for me, but I just doing 4 to 8 ticks per day, I have no the confidence to keep trading, just get my profit and call it a day. I just starting and just increased my capital to 15k, my question is is OK to use 7 to 8 contracts risking like 5 ticks every trade or like 470$ at the time.... Normally my rule should be, after a loss of 470$ I should stop until next day......
I am asking because some friend recommend me to use as max contract as possible, like 11 or 12 that would be good if I win but terrible in the other side....

Thanks

I'm no expert but that seems like too many contracts if you are just learning to read market movement.
If you have money to burn I guess its Ok but I can't relate to that factor.
I feel that it would be more pragmatic to only trade 1 to 2 contracts until you prove to yourself that u have a good strategy.

Be careful. Preserve capital. Only risk 2% until you are ballin.
You could get chewed up on a big move against your posistion. With too amny contracts you would have to set too tight of a stop to adhere to good risk managment rules. You would get whipsawed out of the move. Throw in slippage or a stop jump and you just lost 15 to 20%. With your capital you could set some good deep stops for a good swing if you stick to 1 to 2 contracts.

Sounds like you need to get reps and keep learning.... I know I do.

Good luck!

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  #5 (permalink)
Elite Member
Wiltshire, United Kingdom
 
Futures Experience: Beginner
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Hi,
Don't listen to your friend, that is a recipe for disaster.
You are currently risking 3% per trade which is a lot. I think it should be 1% really, or what I quite often read or hear is the suggestion of one contract for every $10,000 capital.
The ES is currently at about 2050 points and worth $50 a point so one contract is worth $102,500. You want to buy seven or eight contracts so that is $717,000 - $820,000. On a $15,000 account that is between 45 and 54 times leverage of your account. A lot. (That's before you get to 11 or 12 contracts). Just because there isn't usually any slippage on the ES if trading small doesn't mean the market can't, or won't ever, move quickly and catch you out.
Most people probably lose money because they start with a small account they want to make a lot from and over leverage themselves and blow it. You will be much better gradually trading the account with one or two contracts and gradually working up from there. Think of a marathon not a sprint. Start trading small and if successful it can compound up relatively quickly, start big and probably end up with a lot less.
Just my 2 cents.

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  #6 (permalink)
Trading Apprentice
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Favorite Futures: S&P 500 Emini
 
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Thanks guys, I will work on That.... by the way how many ticks is acceptable to get per day using 1 or 2 contracts? ....

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  #7 (permalink)
Trading Apprentice
Durham, NC
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: Kinetick
Favorite Futures: ES, CL
 
Posts: 48 since Oct 2014
Thanks: 0 given, 20 received

Money management is the key to staying in the game and being there to make profits.

How many ticks? That's dependent on your strategy and system, and timeframe.

Optimally you want your profit targets to exceed your loss levels. But there are as many approaches to all this as there are traders. Mainly you want a method that is profitable overall and that you are comfortable using.

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  #8 (permalink)
Elite Member
asheville north carolina USA
 
Futures Experience: Beginner
Platform: ATC trader (OEC white label)
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oscar2014 View Post
Thanks guys, I will work on That.... by the way how many ticks is acceptable to get per day using 1 or 2 contracts? ....

Don't think of it terms of how many ticks made are acceptable. Think about it in terms of how many you are not going to lose. If you are as new to this as you are leading on then you will lose.

I simmed successfuly, took 3 classes and read a lot of books, a bunch of magazines, and researched a bunch online over the course of a year. I was good on the sim. Then started real time and got smacked into reality. Once I started trading live it was like starting over again. If you have never traded at all, then the same is probably going to happen to you......... Unless you are Jesse Livermore reincarnated.

For all i know you could be a natural ringer. I hope you are. But the reality is that this will most likely be harder than you have sized it up to be.

If you are just starting and you trade more than 1 contract then watch this video and think of yourself as the Mother moose and your bankroll as the baby moose. The bear of course represents the market:


THe community would be able to answer your questions better if you were more specific about your trading style and knowledge base. The complexity of this thing called trading renders your questions vague.

If you did just start , you should watch this video first then subscribe to BigMikes you tube channel and binge watch.



This is me my first day of trading.....
THis is me after my first week of trading......

If you search this thread you will find that many of the guys on here who really know what they are doing (I'm not one of them) have stories of blowing out several accounts.

Caveat Emptor dude.......Caveat Emptor.

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  #9 (permalink)
Elite Member
Wiltshire, United Kingdom
 
Futures Experience: Beginner
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Posts: 381 since Sep 2013
Thanks: 361 given, 442 received

Hi,
As others have said, I wouldn't worry about how many ticks are acceptable. One good saying that I bear in mind is that 'You control how you trade, the market controls how or when you will get paid.' Or 'Focus on the process not the performance.'
Trading is tricky because you can do the right thing and lose money, or worse, do the wrong thing and make money. In my opinion you would be better not focusing on a daily profit goal but instead say deciding that you will only take the first strong momentum breakout after the open, or first breakout after consolidation has formed (your first post says you like breakouts), or three trades a day or whatever; and concentrate on trying to get the most out of each move that you can. Some days the market might work with you and you make a lot, other days only a little or a small loss.

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