1NQ 50pt vs 10NQ 5pt which is more favorable?

I think the answer should be 42.
“More favorable” is meaningless quant wise.

What are you trying to optimize ?
What costs are you willing to handle ?

Because 50Pts = 50Pts
minus commissions.

 

Douglas Adams left this planet with the dolphins.

 

I don’t trade NQ often but every time I tag NQ, easily 30 points or $600 in my pocket on 1 contract. However since NQ is dropped to 11k, 30 points is 0.3% movement, vs when it is at 15k level, 0.2% swing. So 10 lots on 5 points is no brainer, probably less than 2000 ticks if you catch the swing, and got a decent size account to put up the margin.

And I tag NQ at the same time as ES, but sit and wait for the target exit.

 

You are thinking wrong. The price of the NQ matters not, just the swings in the thing.

 

Higher average trade means more scalability. So looking for 50 points in your example is favorable. If you only look for backtests you need to be certain of enough trades, so looking for 5 points instead maybe better here. So it depends a bit.

 

IMO 10x5 is much harder to achieve than 1x50

 

You can try 1x5 first to see if it works, then scale up.

 

I don't need to try.

 

What you're really asking is if scalping is better than intraday swing trading. The answer may not be easy, but let's give it a go.

Assuming there's enough liquidity to move 10 NQ, nobody can argue that it's easier to capture 5 points than 50 points.

The mathematical and practical question is how much you're going to risk doing so...?

5 points is nothing, so one have to assume that your stop will be larger than 5 points. Let's say it's 10 or 15 points.

What this effectively means is that you need a very, very high win rate in order to get ahead, because you may have 8 winners in a row (40 points gross) and then 4 losses next at 15 points each. Then you're down 40 - 60 = - 20 points.

On the other hand, if you intraday swing trade risking 25 points in order to gain 50 points, you'll get ahead at the end of the day with a win rate around 50%.

The reason most people fail at trading is because they let their losers run (hoping they'll get back) and cut their winners short. The mathematical result is a negative expectancy.

Bottom line: If can take 5 points consistently with a very high win rate and while keeping risk moderate, maybe it's worth a shot. You really need to maintain that high winrate, though.

 

Here is a NQ 1 minute chart covering a little over an hour from yesterday afternoon with ZigZag set to 5 points. Plenty of 5 point swings available. I've boxed in a trend move followed by a choppy range to show that it is easy to get 5+ points in a trend. Not so easy in chop.

But the only testing worth anything, besides the best way - money on the line, is to use tick data. Tooooo many assumptions are made using even minutes bars. Prolly the same for 15, 30 second bars and fahgetabout completely higher time levels.