E-mini S&P 500 Futures risk parameters

Discussion in 'Strategy Development' started by MarkBrown, Oct 23, 2017.

  1. Any thoughts on risk per trade considering the following

    1.) Day Trading closed at session

    2.) Trades of 5-12 days in duration

    3.) Trades placed Friday entry to Monday exit

    Based on 100k account, I have been thinking of short term index flex options in lieu of actual risk stops. Or perhaps even selling these options and defending with models.

    Last edited: Oct 23, 2017
  2. I don't mean to hurt your feelings... BUT

    Correct trading = (1) recognizing when buying turns to selling, and selling turns to buying.... and (2) what do you do with that info?

    What you have described/asked is irrelevant and nonsense.
    Last edited: Oct 23, 2017
  3. I edited my post to clarify a bit. I am asking give 1, 2, 3 trading methods what would someone think a appropriate risk parameter might look like.

    Then I was thinking of maybe using option selling as a risk vehicle and then it hit me maybe I should just be selling option positions and using the models to hedge instead.
  4. Here's a tidbit I got from years back...

    "If you're going to make any real money, you have to take a large, unhedged bet on direction".

    Still true today.

    If you're hedging, you're not only "controlling downside risk", but also hindering upside potential. IOW... there is still "no free lunch", no matter how you slice it.

    There is more than one way to "hedge". One of which is "stop".
    Last edited: Oct 23, 2017
  5. I would never use stops EVER, the question was about appropriate risk parameters.

    Selling options, you either have to roll or defend with underlying again no stops. But you can't set there like a sitting duck and have only hope.

    You somehow mistook the whole post I think, is about risk parameters not stops.
  6. Enough said. YOU'RE OBVIOUSLY A FOOL! Get your head out of your ass!

    IF YOU TRADE WITHOUT STOPS, YOU WILL NOT SURVIVE IN THE LONG RUN!! All it takes to ruin you to to be "wrong big time".. once or twice over a career... and you're toast. That's a risk you should not take.

    I'm trying to tell you... this is a "slap in the face" wake-up for your wrong thinking. If you don't give it a thought, nobody can't help you.
    Last edited: Oct 23, 2017
    Spooz Top 2, Xela and comagnum like this.
  7. If you have no plan for reversing a trade then I can see your point, though not agree with it at all. Stops are for amateurs, brokers, professionals to exploit. So if you're in that category you will love and promote stops, yet not be foolish enough to employ them yourself.

    You are not understanding the difference between mitigating risk and having foolish stops. I have never mentioned stops if that's your thing please move on to a thread where stops are being discussed. Otherwise this is the big boys pants discussion here.
    tdazio and Zodiac4u like this.
  8. OK... apology for repeating myself... YOU'RE A FOOL! Not listening to any more of your stupid-think. ON IGNORE!!
  9. Overnight


    Well, I can give you an example. This pic is an example of not using a stop...The only "hedge" I have on this is the account size while considering time to expiration of the contract (It is NQ March 2018, same rules would apply to ES). As of this typing, the position is down ~$1,200. How low can it go before it breaks my margin requirement? That takes a lot of study and a whiff of luck that we don't have a global event that will suppress the market for 5 more months. <--- That is a risk parameter. https://www.elitetrader.com/et/attachments/nqliveoct-long-summary2weekendsnip-jpg.178892/

    Here is an example of a hedge that is based not on account size, but a calendar spread. Timing proper exits as Scat has mentioned?<---That is a risk parameter.

    I think you have asked a too-broad-based question to be given a simple answer.

    From what I can glean, options on futures might be your best choice for hedging ES with the limited info you have provided. But if managed properly, you could go far with 100K in your account without them. Just don't get cocky with position sizes.

    I know nothing about Ops on Futs. Might wish to ask Old Man Morse or Mattz, they have much knowledge on those bits.
  10. If you choose to not use stop, a word of advice - never average down or lever up more than 2-3x (account size vs notional value).
    #10     Oct 23, 2017