There is a rather common myth about compounding the account regardless of how many "handles" you take out of the ES and other futures. It sounds easy enough but in real world it is harder said than done. Taking a small loss with a single car is not the same as taking a small lose with 100 cars. How would you handle a SERIES of small loses trading a hundred cars? How about 200 cars? See what i mean? Trading with large size is hardly a possible goal for most traders. Consistent is first goal, only then can one even consider more cars. Compounding is a myth except in money market interest paying accounts. Now back to the original question: 5 handles a day minimum is a proper goal to shoot for in the daily mission. Anything less and you are not trying to get the intraday swings. Do not trade for ticks or a handle here or a handle there. Go for the levels. There will be days when getting 5 handles will be a real chore, some days you will miss. Remember to NOT give previous days profits back. A bad day when you are experienced enough is to break even. Some days will be a lot more handles if the mkt is as it has been since last June because the financials once again found a way to blow themself up. Ok, about compounding once you get consistent. You can sweep the account monthly and start each month with same account size. Then and only then when you are conditioned how to trade what the mkt throws at you will you even consider to increase the size of the trades. This is not a merry go round game, trying for the brass ring and you might fall off your wooden horse. Consistent, thats key.
This is a myth due to the fact that you will need to use a lot of that to pay expenses to live on, taxes et cetera. I just find it odd that many traders do not take into account all the expenses involved in trading for a living. However, if you have no bills nor debts, still single and live off of someone et cetera... All that myth of making millions via compounding on 1 ES point per day may come true if you can manage the markets when they change (markets always change), proper position size management and manage the ever day grind (stresses) of trading et cetera. Heck, it'll come true for any other decent job. Mark
has anybody posted a few consecutive day's trades on the ES? I'd like to compare range to what I get trading the YM.
I have placed short at 1371,00 April 2nd close my position at 1356,00 8th of April. I went long at 1331,00 April 15th and closed my positions at 1364,00 April 17th. It's almost 2 points per day right?
I don't view anyone as a 'master' per se -- there are experienced traders and inexperienced traders -- and shades of 'good' or 'bad' in both categories. But I'll bite on your question: to me, if a person can pull 2 points profit off the ES per day with a very, very high degree of consistiency and perform outstanding money management to minimize their drawdowns and risk, I would view them as a 'master' regardless if they're trading 2 contracts or 200. But a 'master'? Hardly - I view them as a "good experienced trader" whom I can try and learn from.
the point is not how many points per day you can make it but rather how much risk are you taking to obtain such result. a master at trading the es will be able to obtain a net positive result in exchange of a fraction of the risk (i.e. drawdown). in nominal terms, a pro will want to have its risk adjusted returns averaging 3 to 5 times what his/her DDmax. so if one's goal for the day is 2 es handles, then the risk should not exceed 2 ticks (half es handle).
Two more variables must be known for this to be true. How many trades per day and how much do they each cost. It's certainly possible to be losing money everyday with 1 pt.
yes, commissions MUST be included in everything as they are a business expense. It's like a store owner saying "Well....I was profitable last year if you take out my rent payments" personally, I convert commissions to ES points when logging my results. I count each trade as -.1 ES points ($5). I pay less than $5 but it's close enough. so if I make 5 trades in a day that made 1.75 pts, that is really 1.25 pts. 1.75 - 5(.1) = 1.25. that's just how I like to record things for myself.