Smilingsync is correct... there isn't enough info to provide a specific number. Assuming you fill in the variables regarding you and your trading, here's the formula I use. I'll use your stated 90K for this example but you must keep in mind I am a daytrader and am flat by end of day, each and every day. 90000 (Acct Value) x .6 = 54000 54000 / 1575 = 34 contracts maximum simultaneously open across all instruments traded. explanation: The figure of 1575 represents 30% of exchange minimum margin for the instrument with the highest exchange minimum margin that I trade. For me, that's ER, which has exchange minimum margin of $5250. This calculation is used REGARDLESS of INTRADAY minimums offered by my broker, or whether or not the base-line instrument is actually traded that day. Keep in mind, I am a daytrader. I am flat by the end of day. The only thing I hold overnight is cash! For those thinking this calculation is too aggressive I'll just tell ya that as a daytrader, there are only 2 ways that a single trade would be allowed to go against me 1575 per contract. The first is an INTRADAY GAP, but I'll ask you this... when was the last time ES GAPPED 31 handles, 126 ticks actually, INTRADAY?? The second is I drop dead at the switch. In this case the position would be at least partially closed out by the broker due to overnight margin requirements. Combined with the fact that (most) futures-only brokers make actual contact with clients when accounts require broker intervention, the probabilities are very high my loved ones would receive enough money from the account to give me proper farewell. Recall, only 60% of the account value is used in the initial calculation. For the record, as exchange minimum margins change so does my calculation. Earlier this year I used flat figures of 1000 and 1250 per contract, again regardless of broker intraday offerings. As volatility increased, so did my self-imposed requirement. Osorico
Exactly. Anything else is just a real rough guideline. I've heard of the number $7500 per contract for NQ, ES, YM. But with good risk management and tight stops, I believe the number can be reduced to about $4k or $5k. If scalping, even lower. Trading track record, or if system trading, max drawdown amount would have a major impact on this determination as well IMHO.
For the last 6 months I have traded only the YM and continue to do so, I also lowered my acct to 22k. I am a day trader, always flat at night. I use a 7 point stop and remove 1/3 of position after 2pts, another after 2 more and then actively magage the last 2, letting them run or cut them when indicators tell me to. I have about 5 years experience, I am self taught, I have been trading full time for 4 years, since I lowered equity to 22k I have been trading 3 YM contracts at a time and scale out 1 at a time. I would say I am a conservative trader (I do not overtrade) usually 3 or at most 4 trades a day. I hope this info is what you wanted to know if not let me know I appreciate all the help Chris
hi, Here is an educational tool (a reality check) I built for eMini traders... It analyzes individual $ Goal per day for a given eMini instrument (ES, ER2, NQ, YM) and determines the Number of Trades one need to make to reach a Daily goal, keeping given Win%, Profit and Stop loss... http://www.surinotes.com/index.cfm?CSEL=2200 regards, suri
Um, Chris. If you meant to write "... and remove 1/3 of position after 2pts, another after 2 more and then actively magage the last 2" and you're talking about the YM contract, you need to get your skills up before we can have a meaingful conversation about position sizing. You need to increase your first goal to at least 10pts profit (I wouldn't take less than 15pts) and the same can be said for your stoploss, even if you are scalping. There are some decent threads around here were you can learn some good stuff, start with the AHG thread by anekedoten, and keep going from there. Good luck, JJ
Trade one contract until making money on a daily basis becomes routine. Then and only then can you start looking at adding more units. With time and experience you will know when to use max leverage and when not to.
I learned my lesson the hard way. Just trade what you feel comfortable. For YM, it's $5/tick, if you have say, 4 contracts, that's $20/tick, can you stomach stand it if as soon as you enter a trade, it goes again you for 40 ticks that's $800.