For a long time I have wanted to do a 100 lot clip in the Bund, T-bonds, ES, or some other "serious" futures contract, but I was always intimidated by the risk. Finally today I manage to do it, so I thought I'd give a brief account for anyone who is interested - maybe it will help them step up their size too. Normally I trade 20 lots in the Bund, and have not gone bigger than 40. However, a while ago I read a superb (IMO) post by AMT4SWA about the psychology of stepping up to bigger size: http://www.elitetrader.com/vb/showthread.php?s=&postid=384872&highlight=blow+wire+fear#post384872 After reading that, I decided that if I saw what looked like a really great trade, where I had big conviction, that rather than scale up a bit bigger, I would say to hell with the risk and do my first 100 lot trade. It was then a matter of waiting for it. One pattern I like in the Bund/Bobl is where the market has been chopping back and forth a bit above its lows for a while, and then the Bund comes back down near the lows, and yet at the same time the Bobl is much further away from its lows. If the Bund then just sits there with no real selling for a few minutes, then the pattern is set up. So, when today I saw the pattern, I thought ok, I have to try it now or never. I took a deep breath and then bid for a 100 lot at a price of 114.93 (this was done around 13:05-10 CET, so you can check the setup on the charts). I got filled a bit at a time - there was no backing out now. I was ready to get out if 90s started trading. My target was 98, just below the previous high. The market then traded out and went 93 offered, and 92s traded and looked like they might trade out. I got the feeling that I should exit to save a couple of ticks, as it looked like the market was going to go against me, but I was determined to wait for my stop or my profit target to get hit. Until then I would sit on my hands. The market then started to tick up, and the 3s traded out, then it quickly went 4 bid, then 5s started trading and it went 95 bid on size. I got a bit light-headed - it looked like my first 100 lot might work perfectly! My plan was to offer out most of my position just below the previous high, which was 98/99. To be on the safe side I had orders to sell 40 at 97 and 40 at 98. I planned to keep the other 20 and run them, or stop out at breakeven if the market went back to 93 and looked like going 3 offered. After trading 95/96 for several minutes, the market then made a second move, the sixes traded out and went bid on size. Normally this would be routine for me, but with this size on I was reacting differently, much less detached than normal. The market looked strong and suddenly I succumbed to the lure of trader's greed - I pulled my 40 at 97, seeing visions of the market breaking out and retesting the days highs 15 ticks higher. I would exit 40 at 98 then run the other 60 for a 15+ tick winner. Suddenly the market spiked up through 98s, as though someone were covering shorts in a bit of a panic, and the 99s traded. I got even more bullish. Then the 8s traded out again, and it was 97/98. Suddenly I realised that might have been a short term top - classic panic covering, right at the level of the previous high, and looking bullish just before it pulled back. I offered 98s, but the 97 bid eventually traded out, and I missed my chance of a fill. The market then ranged between 94 and 97 (with small size at 93 and 98 briefly) for the next 40-odd minutes, getting tantalisingly close to my desired 98 fill price, but I stubbornly refused to accept 97s. Finally the 93s started trading as the US T-bonds opened, and I stopped myself out at breakeven. Despite this, I was pleased that I had finally done my first big trade in that market. I had finally fulfilled my ambition to trade a 100 lot, win or lose! My entry and first exit was good, but then I let first greed and then stubborness get in the way of what would have been a near-perfect trade. Still, I had made a nice profit, and it was better than losing. So, my advice to anyone who wants to step up their size is this - wait for a really good setup, then get in on 5 times the size you a comfortable with. Then set your profit target and leave well alone! Avoid the "coulda, woulda, shoulda" and stick with your plan. Good luck
Congratulations! It will be fun to see how many people on this board all of a sudden are trading 100 lot bunds and switching to x-trader the coming weeks
Fantastic!!! You have inspired me now. I have been meaning to increase my size 5 fold for quite a while. Havent done it. Will try it soon. If i do it I will owe my sucess to you. Anyway graet job.
I hate to be a partypooper but to suddenly trade 2 1/2 times your normal size seems kind of rash to me.
Your step by step walk through of your thoughts during this trade was a great read. There's actually a nice lesson or two here. (or more) I'm sure different people will get different things out of your post. You showed how emotions need not be in trading decisions. Your planned entry and exit were there, but you changed your plan due to emotion. Also, if you have a trading method that works, it works no matter what size you have on. The market doesn't know that John Doe has put on size and will act differently this time. Congrats on popping your own cherry with the BIG LOT trade. By the way, I'm curious what your fill prices were. Thanks for sharing.
As much as it's a great story, that is not the way to increase size. To jump from 20 or 40 to 100 is disaster in the making. How do you ever know what a good setup is? I have traded the ES for over 5 years and often times what might look like a good setup isn't. You just never know. Something else to keep in mind is the when you increase your size you increase your volatility. This is because if you were comfortable taking 4 ticks heat on 20 contracts, what is the appropriate stop on 100? Is it still 4 ticks? This is a question for you to answer. I know, because I have had some large trades on before and you do think different, especially when it doesn't go your way. I do want to offer congratulations for doing well today, but increasing size like that is usually leading to disaster.