Looking for TF traders: what max # of contracts do you feel comfortable trading?

March 11th, 2011, 02:48 AM

I was trading TF regularly a few months ago and whenever my stop orders were hit, about 50% of the time there were some slippage, and the worst slippage was 4 ticks. And I was only trading one contract.

March 11th, 2011, 05:37 AM

mattz

Here is another calculation to consider:

Account Size
Contract Full Point X Contract Size

In your case:

500,000
100(a point on the TF)X800(Estimated Index Level Now) =
500,000= About 6 Contracts
80,000

Now you 6 contracts using no leverage. Maybe you should start here.
As you see, larger account size don't have to take such a big leverage and you can increase your size by 1-2 until you reach a level that the impact on the account is too much for your taste.

I have not posted in a long time...good to be back.

This is an even more conservative approach, as it does not use leverage. In this case you can also switch to exchange traded funds.

mattz · March 11th, 2011, 08:08 AM

Fat Tails

This is an even more conservative approach, as it does not use leverage. In this case you can also switch to exchange traded funds.

It's a starting point in terms of thought and a way to measure leverage.
You need a reference point to start from, not one to go exactly by...that's all.
Once can increase based on experience, volatility and method.

March 15th, 2011, 03:44 PM

Laguna

Looking for TF traders: what max # of contracts do you feel comfortable trading? Since it is so much smalller than ES: trying to exercise caution in increasing contracts.

For me...no more than 6 contracts in normal or high volatility price action. In contrast, I'm on the low end (1 - 2 contracts) in low volatility price actions. I've been using this position size management for many years now while trading the Russell 2000 Emini TF futures.

Also, the word I keyed in on was "comfortable" (psychological element). This just because money management or account size dictates someone can trade more doesn't implied a trader should do such. Also, I've seen too often traders lose their discipline when increasing their position size even though they have not violated any money management or position size management rules.

Mark

March 16th, 2011, 04:10 PM

holymouse

I was trading TF regularly a few months ago and whenever my stop orders were hit, about 50% of the time there were some slippage, and the worst slippage was 4 ticks. And I was only trading one contract.

Did you experience 4 ticks of slippage one time, or was this a reoccurring issue? Did it happen outside of RTH? I haven't heard of 4 ticks slippage in the TF with only one contract.

Looking for TF traders: what max # of contracts do you feel comfortable trading?

Discussion in Psychology and Money Management

Looking for TF traders: what max # of contracts do you feel comfortable trading?