Multiple ES contract traders

Discussion in 'Index Futures' started by pretzel, May 1, 2003.

  1. pretzel


    Just wondering how many contracts do you trade per position? And how do you scale out?

  2. 3 separate entries into a falling price if long within 1/2 hour of signal.......and 3 separate exits into a rising price within 1/2 hr. of signal or moc that is time segmented from 14:55cst through 15:03cst.

    Michael B.
  3. pretzel


    Seems that the results show that players who do multiple contracts trade more than 5.

    I have moved up to trading 3 contracts and my results have improved. I'm following the trade management suggested in Mark Douglas' Trading in the Zone.

    1. 3 contracts entered at market on an entry signal with a 1 point stop right away
    2. scale out at +1, +2, +4
    3. move stop to breakeven + quarter after the 2nd contract is out
    4. no trailing stops
    5. sets of 20 straight trades without changing the parameters


    P.S.: I'm using a modified BT for this style, anybody interested can PM me for a free copy.
  4. All in, all out.

    You are either right or you are wrong ...
  5. dottom


    I never scale in or out. The only reason I would consider doing so would be psychological reasons. Too many traders scale not realizing that they are in effect utilizing different systems. If you buy on a breakout... then scale in some more on a pull back... then you are trading two separate systems. If you enter all your positions on entry, but scale out some for small profit and let the rest ride with trailing stop, you are again trading two separate sytems.

    Each system has its own performance and risk characteristics. If you want to trade both systems (e.g. both a breakout and a pullback system to even out the aggregate equity curve), that's fine, but realize what you are doing when you scale.
  6. bone

    bone ET Sponsor

    I never scale out of a loser.
  7. pretzel


    Yes, that's the main reason.

    Two situations -
    1. You're just one tick before hitting your target and the market reverses and you're stopped out at a loss.
    2. You get out of a profitable trade and then the market takes off leaving money on the table.

    At any point while in a trade, how do you decide to wait or to get out? This requires a split second decision unless you're scaling out.

  8. for the ages!!!!!!!!!!!!!!!!!!!:)
  9. Excellent points!

    That's exactly why I don't scale into my positions.
  10. pretzel


    From what I have read so far, most advice for multiple contracts is to
    1, enter into a position all at once (no scaling in)
    2. scale out of a winning position (to decrease risk and lock in profits).
    3. always have a stop loss
    4. close all your positions at once if there is a sudden move in your favor

    Of course, each trader must ultimately find their OWN style that works best for them over time.

    #10     May 2, 2003