Quote from guy2:
true again - however I like the idea that 5 back to back 5 point days (i.e. half the daily range) - would take an account from $5k to...
1 -> 10
2 -> 20
3 -> 40
4 -> 80
5 -> 160
Hi Guy2, nice maths... but if you don't fully automate the strategy, you have to factor in the mind adaptation time to the increasing size.
See, lets say you got really, really lucky and passed through the 4 days as your plan suggests...
Picture this : Friday morning, ER2 opens, you send your 100 contracts long order to the market. Oops you just ate 3 levels of market depth.
You're not used to that.
The markets gets a bit wild and moves against you. You start sweating. Each tick is $1,000 worth.
You don't know why, but you have just canceled your stop loss order. Market drops 2 points.
At this point you feel totally paralyzed. While the market is falling, you realise you got caught in a trend day of ER2.
Just a thought...