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Trading Size

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Since you trade the ER2, Walter, that was 6 ticks initially, right? Now your target is 1 full point, and sometimes 2.5 points on the Russell on a high momentum day. Not bad, indeed.

 

Just curious, what is your downside limit? When do you say "no mas" to your losers and call it a day?

 

 

jejejej "no mas" yes, it happened to me on a few ocations to be -200... wasnt on the zone... just get away, recovered on three sessions.... lately sometimes my max drawdown has been -80 and recover quickly... then make +100 and off for the day... it works... I say this way : there are easy and hard days... an easy day you dont have stops, make 100 you are out... hard day maybe you get couple stops, need to make more work.... maybe some of this very hard days I end with +50 doesnt bother me... always try to have a + number at the end of the week... between +350 to +500... cheers Walter.

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Walter - another question if I may - if your goal is $100/ct and done, how are you sticking around for the $250/ct days? Do you arbitrarily decide to let trades run for the sake of letting them run? To make $250/ct, you are violating your daily goal rule. I'm wondering how one makes the distinction of stopping at $100 or going for that $250, which is more than double your initial goal for the day.

 

 

When the market its outside a keltner 50 exp, 3.5 atr on 110 Tick russell chart, I stay inside a runner (1/3 of position).... if we are inside keltner I consider cyclical market... go for $100.... (on 30 contracts its sweet, believe me).... cheers Walter.

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Glad to hear that.

 

However, theory is your emotions NOT playing some role in the application of your trading strategy; reality is realizing that there is some psychological component to the proper and profitable recognition and execution of our valid setups and adjusting accordingly.

 

And the 'adjusting' that you speak of (arbitrarily picking when to stop, arbitrarily picking what trades to take and/or when, etc.) is exactly what will over time destroy a P&L. Over time, you cannot with regularity pick and choose when to stop and when to trade and expect to be correct the majority of the time.

 

Point being that we all know trading is difficult enough as it is, but as soon as you limit your upside, you've just made the equation even harder to complete.

 

Also, as I asked before, if you believe in capping your gains Cooter, at what level, if any, do you cap your losses? Since this is obviously a psychological debate here, I'm curious to know both sides of the story. It's easy to say keep trading till you make $XXXX, but what if you don't get there right away? What if you take a number of losses initially? Since your argument is that human psyche must be a consideration in your analysis, how do you 'adjust' your trading when you are in the hole initially?

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I should add something here : The market performs normally more eficiently on the first hour and a half... so trading on this first part of the session is one thing and trading the lunch hour or the last hour is a diferent thing... so when you get used to trade on this first part of the day and make your daily target, there is no reason to get your trading into a part of the day that you are not most used to trade.... if things whent against you, maybe you will consider staying the entire session and try to recover yourself to make the day at least even.... but you see if you made your day on the part of the day you feel confortable, no need to keep trading.... should I add the fact that a lot of profesional floor traders apply this strategy to trade a daily target and walk off the market... that some times may explain why market can get so dull after certain period of trading... there are a lot of participants that are not there any more until tomorrow.... lol... cheers Walter.

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The above statement by Walter is one of the most important in this thread. If you do stats on your trading according to wins and times of day, it should be quite revealing.

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The above statement by Walter is one of the most important in this thread. If you do stats on your trading according to wins and times of day, it should be quite revealing.

 

EXACTLY momentom - each trader has to do their OWN statistical analysis on their trading setups/habits. I personally have found that when my setup appears, I need to be in b/c if there's only one good move in the day, that can make or break my end results.

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Wow guys, I really didn't expect to get so many responses. This is great. I appreciate all the insight.

 

I have been thinking about this large size trade and I realize I need a different set of rules. One being, if I am stopped out, it would be equal to 5 days of stop loss limits. That alone will really make me really really cautious. I have to think this over. It won't blow me out even after two straight losses. After that this experiment is over.

 

Also, for those who warned about blowing out. No worries. you see, I have a few futures trading accounts spread out over several brokers. I did this first to test out which broker I liked but also I can use one for swing trading, one for daytrading and a third to test out new trades, like longing a position I am short in another account.

Another advantage is not having all my eggs in one basket so I don't buy too many lots that would do alot of damage.

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Wow guys, I really didn't expect to get so many responses. This is great. I appreciate all the insight.

 

I have been thinking about this large size trade and I realize I need a different set of rules. One being, if I am stopped out, it would be equal to 5 days of stop loss limits. That alone will really make me really really cautious. I have to think this over. It won't blow me out even after two straight losses. After that this experiment is over.

 

Also, for those who warned about blowing out. No worries. you see, I have a few futures trading accounts spread out over several brokers. I did this first to test out which broker I liked but also I can use one for swing trading, one for daytrading and a third to test out new trades, like longing a position I am short in another account.

Another advantage is not having all my eggs in one basket so I don't buy too many lots that would do alot of damage.

 

I have to be devils advocate here. However "good" your system you should absolutely expect 2 consecutive losses, hell its quite likely in the first two trades. If your experiment is gonna be over after that personally I wouldn't bother doing it. If you are going to stop under those circumstances you are gambling. (Incidentally it can be shown that if your system has not got a positive expectancy you are far better of staking everything on one spin of the wheel)

 

This is all just a function of probability and statistics. Read about 'risk of ruin' - my favourite account is in "The futures game, who wins, who loses, and why" by Tewles. Van Tharp must covers it too. There are probably free sources on the internet. Risk of ruin is subtley different to blowing out. It covers the probability for depleting any chunk of margin depending on trade statistics. It need not be all your margin (blow out).

 

Even with a method that generates 80% winners (such as momentoms) you will get strings of losers!! I guess if you are risking 2% equity or less (stop * size) on each trade you should be safe for a while but even if you are a completely discretionary trader you should have a good grasp of the (simple) stats behind the scenes. How else do you determine size? Determining size on a whim is far more dangerous than determining entries randomly! Personally I am so under leveraged it would make your granny blush. (saves me having to keep revisiting the maths!)

 

Also I get the impression you are trading without really adhering to a method. In your first post I kinda got the impression that you where hoping larger size would help you find better entries rather than stick to your already well established method for entering.

 

Honestly trading larger size to find better entries is a recipe for disaster. Sorry to be the one to put it so bluntly.

 

Cheers.

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I should of searched the web first. This was one of the first hits that says it far better than I managed!

 

TradersCALM - risk of ruin menu

 

Please give it a read it will honestly only take 10 minutes. Absolutely guaranteed to make a positive difference to how you approach your experiment.

 

btw I have nothing to do with the website above. I don't even know what they do as I googled past there home page into the above.

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Some of the most effective trading strategies incorporate a three-prong approach to entering a trade.

 

  • Consider the overall market sentiment, trend and whether there is congruency in the e-mini futures (i.e., NASDAQ, S&P 500, Russell, Dow)
     
  • Consider whether the the financial instrument being traded is trending or consolidating.
     
  • Determine whether the trade set-up is a "high odds" trade or "low odds" trade.

As more evidence of a potential "high odds" trade is gathered, the position size can be increased accordingly. The reciprocal is also very important to consider. That is, when there is less evidence of a "high odds" trade and a trade signal is given, the position size should be reduced.

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speaking of "when to quit"

 

if i ever have 3 losers in a row - i quit. this is pretty rare (since most of my trades have over 65% chance of "winning" (where i lock in first target and move stop to entry)

 

i NEVER double down after a loser. heck, i never double down EVER. i trade the same size or smaller (i will trade smaller sometimes after a few consecutive wins cause i know there is a chance that euphoria will be negatively affecting my decision making)

 

i've also found that as a (generally) countertrend trader, that i am best quitting at 11:30 EST (if i am not in a trade) and managing the trade i am in once 1130 comes around with no additional entries.

 

why?

 

well, it suits my countertrend trading style, since the doldrums tends to be kind of floppy, and the last 1-2 hours of trading tend to be much more "trendy" and thus countertrend trades are less profitable and/or have less chance of success.

 

i have certain rules to get around this, like certain setups i have are ONLY allowed during pre-doldrums.

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speaking of "when to quit"

 

i NEVER double down after a loser. heck, i never double down EVER. i trade the same size or smaller (i will trade smaller sometimes after a few consecutive wins cause i know there is a chance that euphoria will be negatively affecting my decision making)

 

I'm glad that you get it. Your emotions will affect for your trading, even when you are winning. I'm curious though..why do you stay in the market, presuming these winners have allowed you to meet your daily goal?

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cause i don't have a daily goal :)

 

seriously.

 

i may quit trading cause i feel like it, i want to go work out, i want a nap, or whatever, but i don't like to set daily goals, cause i feel that for me, it's self-limiting.

 

 

i think for some people its useful.

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cause i don't have a daily goal :)

 

seriously.

 

i may quit trading cause i feel like it, i want to go work out, i want a nap, or whatever, but i don't like to set daily goals, cause i feel that for me, it's self-limiting.

 

i think for some people its useful.

 

dalby 'gets it'.

 

There is no point of limiting your upside once you are at the point of becoming a successful trader.

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And the 'adjusting' that you speak of (arbitrarily picking when to stop, arbitrarily picking what trades to take and/or when, etc.) is exactly what will over time destroy a P&L. Over time, you cannot with regularity pick and choose when to stop and when to trade and expect to be correct the majority of the time.

 

Point being that we all know trading is difficult enough as it is, but as soon as you limit your upside, you've just made the equation even harder to complete.

 

Also, as I asked before, if you believe in capping your gains Cooter, at what level, if any, do you cap your losses? Since this is obviously a psychological debate here, I'm curious to know both sides of the story. It's easy to say keep trading till you make $XXXX, but what if you don't get there right away? What if you take a number of losses initially? Since your argument is that human psyche must be a consideration in your analysis, how do you 'adjust' your trading when you are in the hole initially?

 

Coot - maybe you missed my question here or simply ignored it, but if you are going to push the daily goal idea, please share where/how you cap your losses in comparison to your gains. In other words, where do you stop trading if you make money and where do you stop if you lose money? Perhaps I will better understand your argument once you lay it out in actual numbers.

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In other words, where do you stop trading if you make money and where do you stop if you lose money?

 

3 consecutive losses and I'm done for the day in that contract. More than $200 up to $500 in the red overall and I call it a day.

 

For gains, $1000+ is a good day. $10000 is an exceptional one.

 

$200 is mediocre, and usually happens on choppy days with losers.

 

N.B. A scratch is treated as a loss due to commission costs.

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3 consecutive losses and I'm done for the day in that contract. More than $200 up to $500 in the red overall and I call it a day.

 

For gains, $1000+ is a good day. $10000 is an exceptional one.

 

$200 is mediocre, and usually happens on choppy days with losers.

 

N.B. A scratch is treated as a loss due to commission costs.

 

OK, so let me ask this - if you are saying that a daily goal is what you recommend, is your daily goal $250 - $10,000? Because you cannot say your goal is $500 and achieve a $1000 or $10,000 day. It's not possible if you set your daily goal to $500; which has been my point all along. If you can achieve $1000, $5000, $10,000+ in a day and you set your goal to $500, you will never achieve those results until your goal is changed.

 

To say that $250 is mediocre and $10,000 is exceptional, how is it possible to obtain either of those with a fixed daily goal? When I think of daily goals for traders, I am thinking of hard numbers, not a range of $9750. If that's the case, then we are all setting 'daily goals'.

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Some of the most effective trading strategies incorporate a three-prong approach to entering a trade.

 

  • Consider the overall market sentiment, trend and whether there is congruency in the e-mini futures (i.e., NASDAQ, S&P 500, Russell, Dow)
     
  • Consider whether the the financial instrument being traded is trending or consolidating.
     
  • Determine whether the trade set-up is a "high odds" trade or "low odds" trade.

As more evidence of a potential "high odds" trade is gathered, the position size can be increased accordingly. The reciprocal is also very important to consider. That is, when there is less evidence of a "high odds" trade and a trade signal is given, the position size should be reduced.

 

Great advice however to adopt this sort of approach you need to evaluate your high odds trades separately from low odds trades and size appropriately. They should still be evaluated and sized appropriately for the trades characteristics.

 

The OP is suggesting that size somehow will determine the outcome. The one sure thing is too large size will greatly increase the chance of ruin.

 

The other thing to perhaps concider is 'streakiness' of your trading. For example if you are a discretionary trader and finding you are 'out of tune' Thats another good time to reduce size (or take a break!). A similar idea, how about this reduce size on lower odds trades. This is kind of a corollary to what lrushing is saying. If you are more mechanical you can test to see if some sort of filter might reduce losing streaks.

 

Heres another thought - you can always add to your trade on a pullback once the market has tipped its hand.

 

Btw those first two '*' points in the above post for me are the golden ones I prefer to trade tiny and just not sweat number 3. If the market makes the right moves you can always add.

 

Cheers.

 

 

P.S. I found this kind of interesting (and strangely hypnotic).

Its a video of a guy scalping the DAX. Now for all I know it may be some lonely guy making videos of himself paper trading but having watched a few there is some consistency (though he seems to flip between two approaches).What I found interesting was how he scales up to 20 and back out. He explains the rationale in another vid. Oh its 4x speed I think.

 

 

 

 

.

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3 consecutive losses and I'm done for the day in that contract. More than $200 up to $500 in the red overall and I call it a day.

 

For gains, $1000+ is a good day. $10000 is an exceptional one.

 

$200 is mediocre, and usually happens on choppy days with losers.

 

N.B. A scratch is treated as a loss due to commission costs.

 

The 3 strikes and you are out rule is a another life preserver. As is the limit to daily drawdown. If you executed flawlessly and stuck to the plan then those trades where great trades (learn to love your losers is an adage that many bandy about).

 

I have to admit that usually I can identify errors that contribute to trades that get stopped. Normally its simply wrong bias. If after taking a break and clearing my head I feel 'OK' I'll get back to it and often find I am more focused and more importantly 'in tune' having been proved 'out of tune' on the 3 failed trades. Some of my best trading often ensues.

 

Having said that I'm striving for 'lazy' trading at the moment - 1 decent trade shortly into the session and done for the day. One of the points of trading is the freedom it provides right? Actually it is proving hard as I love watching the market. I have got it down to Europe open - lazy time - US open - lazy time - US close (sometimes) - lazy time. There are also psych issues right there as we are taught from an early age that generating 'wealth' and more broadly 'success' goes hand in hand with 'hard work'. I have a bit of a leg up being intrinsically a work shy layabout but there is something that gnaws away at the subconscious maybe guilt.

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OK, so let me ask this - if you are saying that a daily goal is what you recommend, is your daily goal $250 - $10,000? Because you cannot say your goal is $500 and achieve a $1000 or $10,000 day. It's not possible if you set your daily goal to $500; which has been my point all along. If you can achieve $1000, $5000, $10,000+ in a day and you set your goal to $500, you will never achieve those results until your goal is changed.

 

To say that $250 is mediocre and $10,000 is exceptional, how is it possible to obtain either of those with a fixed daily goal? When I think of daily goals for traders, I am thinking of hard numbers, not a range of $9750. If that's the case, then we are all setting 'daily goals'.

 

Hey Coot, just making sure you saw my reply here, I am curious to understand how this daily goal thing works where you can possibly earn $10k in a day or $250 all the while maintaining a daily goal! ;)

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Simple. I have a minimum daily goal. Period. And I usually exceed that, quite easily. But I do understand where you are coming from.

 

Think of Tiger Woods for a moment. He makes the cut at nearly every tournament he plays in, simply because he doesn't play to make the cut, he plays to win.

 

Not too difficult to understand, is it?

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Simple. I have a minimum daily goal. Period. And I usually exceed that, quite easily. But I do understand where you are coming from.

 

Think of Tiger Woods for a moment. He makes the cut at nearly every tournament he plays in, simply because he doesn't play to make the cut, he plays to win.

 

Not too difficult to understand, is it?

 

Coot - I think your view of a daily goal is very different than what is taught by corporations, trading psychology books, etc. To say you have a daily goal means you have a HARD goal that once reached, your day is over. That is how daily goals are structured and taught.

 

Your version is a 'would like to make at least' type goal. I'm not disagreeing with the idea of continuing to trade, since that was my point all along, but you were debating me quite hard on the merits of trading all your setups vs. stopping after you reach your goal. In reality, you are doing EXACTLY what I do - you trade when your setups are there, which can lead to rather large profits in a day.

 

In the end, it is IMPOSSIBLE to have large profit days if you implement a daily goal system (unless your goal is large to begin with). If you set your goal to $500/day, you will NEVER reach $1000 or $10,000 in a day until that goal is altered. You may catch some days slightly over $500 due to a trade continuing, but to truly catch those big winners, a daily goal system will in fact restrict that from occurring.

 

Somehow, we were disagreeing on this topic, yet we are doing the same thing. :rolleyes:

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Coot - I think your view of a daily goal is very different than what is taught by corporations, trading psychology books, etc.

 

Yep.

 

That's why I'm no longer a corporate slave anymore. I think outside the box.

 

I recognize that there is a core component of trading that is psychological in nature. That's why when I'm satisfied with my effort for the day, I call it quits. And I hold fast to the "3 strikes and you're out" concept too.

 

It keeps me around for the next trading session, rather than burnt out.

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Yep.

 

That's why I'm no longer a corporate slave anymore. I think outside the box.

 

I recognize that there is a core component of trading that is psychological in nature. That's why when I'm satisfied with my effort for the day, I call it quits. And I hold fast to the "3 strikes and you're out" concept too.

 

It keeps me around for the next trading session, rather than burnt out.

 

I get what you are saying but in context of daily goals, to say 'I quit when I feel like it' is completely arbitrary and open to much debate on the merits of this. Back to the topic on hand of setting daily goals however, we both in some way, shape or form agree that simply setting a goal of say $500 and stopping is NOT a good idea as you become a seasoned trader.

 

On that point, I think we can agree. :p

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I get what you are saying but in context of daily goals, to say 'I quit when I feel like it' is completely arbitrary and open to much debate on the merits of this. Back to the topic on hand of setting daily goals however, we both in some way, shape or form agree that simply setting a goal of say $500 and stopping is NOT a good idea as you become a seasoned trader.

 

On that point, I think we can agree. :p

 

Brown : you must take into acct that the first hour of trading is diferent to the rest of the session... if you are scalper your first hour its like a session itself... IF IF the market shows a momentum day in front ( very unusual ) then you may consider leaving some runners.... but for the seasoned scalper, his session is normally the first hour and goodby, lets play golf, take a dip on the pool, make love... if he keeps trading ( happens to me ) normally as he is on a diferent allien context he will give back his first hour gains... there is no point in staying on such diferent market context if you made good money on your normal habitat.... cheers Walter.

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Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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