Number of contracts

Discussion in 'Risk Management' started by fandyur, Feb 2, 2010.

  1. fandyur


    I am a position trader.
    Trading with the trend.
    A safe # of contracts to trade would be 4.
    I have been putting on one contract at a time and adding
    to that as the trade becomes more profitable.
    Would this be the best way.
    Or should I start with 4, or 2 and 2.
    Would appreciate any feedback and the reasons
  2. Well, depends on the size of your account really, and how much leverage you're comfortable with.
  3. fandyur


    I'm comfortable with 4 contracts.
    How should I put them on.
    Should I do all 4 at once or the way I've been doing it.
  4. You should trade based on a % of your portfolio. How many contacts doesn't matter
  5. wutang


  6. Well, DUH, if you keep adding as the trade becomes "more" profitable, then the trade was VERY good from the original entry and you should take all 4 right off the bat.

    Then again, you haven't shared your metrics with us so we really have no idea if all/most/a lot of your trades work out this way.

  7. It would be worthwhile to review a bunch of your previous trades and see what the MAE is once you entered.
    Unless your trades never look back once you enter, it seems that you could always improve on your execution by averaging down to reach your 4 contracts.
    I'd probably put <50% right away unless your trade history indicates that you have a low percentage of trades that experience that case, you'd be better served by slightly larger losers which are more than compensated by your big winners.
  8. fandyur


    Thanks for the input.
    Unfortunately, I don't that the trade would be a profitable one at the beginning.
    Thats why I was wondering, do I scale in , or just put on all 4 at once.
  9. It would be helpful if you provided some metrics, we have no idea if this trades results are typical of your system or an outlier

  10. the more bullets you have to fire the better.
    #10     Feb 2, 2010