Determining when to add contracts

Discussion in 'Risk Management' started by logic_man, Jun 11, 2011.

  1. traderrn

    traderrn

    Would be good to keep a buffer before you increase size, this way the buffer can be used (for stops) to get a winning trade back in your favor with the new size.

    Last thing you want is to go to new size, take a stop and have to go back to previous size.
     
    #11     Jul 14, 2011
  2. I tried a variety of scenarios on the trade data I have and it turned out that nothing outperformed just adding as soon as the threshold was reached. I think that means that basically if you have a positive expectancy that over numerous iterations of adding contracts, the winning percentage will tend to gravitate toward the overall winning percentage and that you are likely to add on a winner as you are to have a winner overall. Waiting to add produced inferior outcomes.
     
    #12     Jul 15, 2011