thanks. Found that all I can do is to exclude the those unprofitable area but I can't flip the entry (go counter to the trigger) to gain anymore Even tested those unused signal of trigger (entry and exit only, not the market definition), it's a pain there is still some left, but not much...
I'm still a relatively newbie trader. Your topic is a very interesting one. I can only say sometimes it might take a very long period of time to demonstrade/ prove whether a system is becoming stable, reliable, consistent enough in order to take higher risk/ leverage.
First my general advice: I suggest you honestly identify the max DD you can "handle" at present. Let's say the $10k. Then size so that you're expected maxDD is $10k. That's how i start all my new systems. Then depending on how much return you see, you should increase or decrease position size accordingly. One example would be that if you've made 10%, you should increase your position size by 10%. Finally, i would never double my position size in one step, I have added 30% a couple of times but usually it's smaller than that. You have to "get used" to the larger P&L swings (or at least I do).
Does not matter! I can say that I have learned from newbies almost AS MUCH as I have from the experienced. All traders coming here to ET is its lifeblood... posting learning doing remembering reflecting refining experiencing Michael B.
Exactly, if you have a profitable system on 100 shares, it should be just as profitable in percentage terms with 200 shares or 130 shares. Yes, the absolute dollar swings will be greater when scaled up, but the slope of linear regression curve through the P/L graph should stay the same. Now if you scale from 100 shares to 1 million shares, that would be different because the big line you are swinging would have a market impact.
I agree. You do not necessarily improve the edge, just keep up with it. But if there is a definable way to rank a set up there might be a slight improvement over traditional methods...so far I have trouble to define higher probability set-ups within my own trading (I think all of them are great going in )and I do not even know if its possible. But I am considering it with my next trades and can gain some more "hands-on" experience perhaps, before I start rendering advice. but the slope of linear regression curve through the P/L graph should stay the same.
To be honest, I was on a 1 contract of full size HSI, and had to go up to 2... Given the volume, the mini HSI contract is really untradeable, full size HSI is as bad as it is... HHI contract is OK with a bit more noise, but the amount of margin and profits makes it seems unprofitable compare to the HSI. IMO, Mainland chinese companies (HHI companies) moves as a group in respect to their industry, and HSI with it's new composition had taken on more mainland companies stock. They are getting increasing more correlated.(ie, like banking, there are one of the big listed on HSI, and one listed on HHI) Then again, Hong Kong is try to become an offshore financial center for china, it's logical but it's not good for a local trader trying to trade local futures contracts. Would love to trade Dax, but I guess I need a year or two..
Here's a model based on trading the mini ES contract. While the Performance Bond required is going to be substantially different, the math is applicable across the board (whether you are trading futures, stocks / financials grains metals / us, euro, asia / etc.). The main idea is to only increase contract size when you have effectively doubled your performance bond based on the number of contracts traded (this increases your equity geometrically). *** For example: 1. Let's say you're trading the US S&P 500 e-mini contract. 2. You are trading the contract with 2,000 minimum account size. 3. Now add 1 contract when you have doubled the 1 lot performance bond to $2,000. 4. Once that is done, you are now trading 2 contracts. Now add 1 contract when you have doubled the 2 lot performance bond to $4,000. 5. Once that is done, you are now trading 3 contracts. Now add 1 contract when you have doubled the 3 lot performance bond to $6,000. *** Etc., etc. While the contract increasage is arithmetic, the equity increase is geometric. While I realize that the performance bond required to trade the Hang Send Index is substantially greater than that required for the ES (by about 8 times), the concepts and math are still applicable. Obviously, by trading a security/securities with substantially lower performance bond you would be able to effect a greater progression in contract increasage and trading performance. Best Regards, Jimmy Jam