I would agree with that. By all my calculations including avarage daily range, volatility etc, I've come to the conclusion that trading 2 cars on ES has a very close $ risk correlation to trading 4 NQ. (which pretty much agrees with your 3.5-4 point estimate...) Natalie
I concur with the both of you. Spreadem- no offense, but your math is waaaaaaaaaaaaay off for calculating risk of Es as compared to Nq. Bottom line, Nq is lower no matter how you look at it. -momo
I agree IF one is strictly interested in maintaining the 1 % factor AND you are risking 12.5 NQ points each trade - but I fail to see the comparison between 2 ES and 12.5 NQ in a system. Not equivalent. More like 4 or 4.5 NQ = 2 ES in terms of how much they move. There is a reason it requires less margin to trade NQ, both intraday and overnight. IMHO a person could trade NQ with same or less acct. size than ES. and still have sensible RtR. Thanks for explaining. Paul
I agree with you guys that 2pts in ES will relate to 4pts NQ. The main point of my comment is that it's prudent to risk only 1% of your account value. For example if your system allows you to risk 12pts when trading NQ then you need to have $25,000 in your account. One daytrading system may allow you to risk 12pts and another daytrading system may only allow you to 4pts. These are two different systems. I think many traders make the mistake of believing that since the broker only was a small margin then we should go ahead and trade ES or NQ. The decision to trade ES or NQ rests on the ability of our system to stay within risk parameters rather than if we can afford the daytrading margin. I see too many people fail at trading ES and NQ because they risk too large a percentage of their account per trade. The worst part is that many of them really understand the other parts of trading.
From the original assertion. In the same way one could say that one system on ES requires 25k and an different system on ES requires 10k. When making comparisons it would be better to compare like for like. On like for like, I'm not convinced about the bigger account argument at all. On like for like, it takes a smaller acount size to trade NQ as far as I can see. Natalie
This isn't what you said originally: "A very smart trader figured out that if it takes $10,000 to trade ES, then it'll take $25,000 to trade NQ. In other words if you only have the ten grand, stay with ES." I don't know how smart he was, but this statement really doesn't make any sense. If you have $10k and you want to risk 1% on the ES, that's 2pts. If you have $10k and you want to risk 1% on the NQ, that's 5pts. Where does $25k come into it? --Db
I agree that 1% is a prudent risk. Some will risk more, some will risk less. However, this has got absolutely nothing to do with your original statement. You (or a very smart trader) could easily have said that you need $50,000 for ES as 1% of that is $500. It is just throwing numbers around without taking into account how ES and NQ trade relative to each other.