I find it surprising trade size would be dictated by an "expected" gain. For myself, specific signals along with a volatility factor will dictate size. Using the "singles" metaphor, assuming one of my garden variety signals, volatility all but guarantees a single, so **IF** high volatility is present in those cases, increased size is used. With my less general (i.e. much more specific) signals, volatility (or expectation of) is included in the signal already. I NEVER add size for PnL metrics. For day-trading indexes, my vanilla size is 3. Increased size is multiples of 3. I am also all-in-all-out, no scaling in or out. I am not challenging or suggesting anything. More likely I've glossed over or misinterpreted some part of the discussion. Trade On!
It's true that trading dozens of contracts in this environment of 2-300 size levels is more problematic than at times when there are 4 figure levels but only slippage will tell you when you are too big....that and margin capital but that comfort level and risk tolerance varies considerably among traders.
Good question. The reason I am trading a piddling amount right now is because I want to know whether my research actually works in real life. It seems to. I do size with volatility but what other signals do you use?
I am reliant on volume and price-pane geometry. For me, volatility is present in volume, and manifests itself in the price-pane.
What is volume and price-pane geometry? I agree volume can be a reflection of volatility but I don't use it as such.
Speedo, the 3 operations you took, are 3 individual operations or are the 3 part of a single operation?
Separate, I don't know when a move is going to run. If it does it often gives a number of entries (like the example), if it doesn't, I don't worry about it.
For this to work, there must be momentum, otherwise everything is noise, you use some indicator to measure the momentum or you simply look at the price range