Compounding futures calculation?

Discussion in 'Index Futures' started by Times, Mar 6, 2019.

  1. Times


    So, normally compound calculators use % but in regards to futures, contracts is how people normally grow.

    I am curious if there is a calculator or calculation someone has that can compute the equity curve if someone were to put all profits into increasing number of contracts rather than taking any profits
  2. jharmon


    Depending upon what you're trading, if you're starting at "1" contract there's a fair amount of quantization between the next few levels as far as compounding is concerned, but not so much going from the mid teens upwards.

    If you're dealing with liquid markets, it's just a straight multiplier.

    What number of contracts/markets are you trading?
    tommcginnis likes this.
  3. Times


    I normally trade indices NQ,ES,NKD with 1-2 contracts and been taking profits. Curious on how fast futures can compound if someone were to take no profit and just increase contracts. Assuming someone has a winning strategy it shouldn't be too much of an issue.

    Surprised there is no online calculator. There are many in % returns which is normally for stocks/interest
  4. Its called Martingaling
    tommcginnis likes this.
  5. Overnight


    Scaling in will eat you up and spit you out faster than you can run to your bank if the market turns on you. You don't need a calculator for that, you just need your own head.

    Futures can compound positive very fast! Like today on the long side. But they can equally compound your losses if they reverse direction. And if you hit the margin call? Well, whoopsie daisy! Would suck to be that person.
  6. maxinger


    I don't think those calculations are that important.

    what's we need to know is trading is highly scalable.

    That's say you are ok with trading with 2 lots, and your monthly profit is say $10K.

    Then simply increase trading lot size to 4 lots, and your monthly profit will be $20k
    with the same hardware ,software, mindset , resources.

    6 lots ---> $30k
    8 lots ---> $40k
    10 lots --> $50k

    etc etc etc