I would choose the second trader who trades 50+ contracts for 2 points each per day. If we are to compare apples with apples, then I will assume that the risk/reward relationship between the 2 methods is the same. However, if a trader can regularly pull out 4 points a day per contract and can only play a few contracts, then that suggests to me that, for some reason, the method is not adequately scalable. Otherwise, what would prevent the 4-point guy from trading larger? If the risk/reward is essentially the same, then I would prefer the method that can better accommodate larger size.
Not rue. What he makes is the PROOF that he knows what he is teaching... By the way I forgot to mention but the 2 and 4 ES are per contract. I thought it was obvious... Thundy, you had a good point and explanation why people would choose #2: Well, his comfort level... But if his strategy is scalable then it doesn't prevent you to trade bigger size, once you learnt his method...
There are many other variables, but given the information we have to assume that these are consistent results happening everyday. I think that with the ES it is all about the points. It is so liquid that an increase in size (within reason) in any strategy during regular market hours would not deteriorate its performance. The first trader makes double the points that the second trader makes. If I was to mimic one of the traders, I would choose the first trader and start small. If warranted, I would gradually increase the size of my positions. If the consistency of the performance is maintained then rewards greater than the second trader would eventually be achieved.
But it says nothing about his ability to teach. So, again, it depends on whether you want somebody who'll teach you how to trade or you want somebody to imitate.
If that is the only reason the smaller trades chooses to remain small, then the answer is obvious, assuming the legitimacy of the claims. In that case, all else being equal (i.e., risk/reward), the obvious choice is the 4-point method. But that's like having a poll asking if someone would rather have $100 or $200, all else being equal. Which then begs the question, what is the point of the poll? Why do my polls never get much action? http://www.elitetrader.com/vb/showthread.php?s=&threadid=77283
Again, I agree that it is an important piece of info, but let's say it is not aviable, or they are both good teachers. I assume you would try out both and would stick to the better teacher. Is that correct? Not a bad decission... Well, I did have a purpose, but first wanted to see the results. I will tell in a few hours...
Your poll cannot be answered without knowing some additional statistics. What is the maximum historical drawdown of the systems? The first system may be trading smaller size because it has a large historical drawdown, and the account must be able to survive any expected drawdown. What percentage of days are winners? What are the largest win, average win, largest loss, and average loss? The systems must be tested, perhaps in a Monte Carlo simulator, to see the probability of ruin and final equity curves. In summary, there is not enough information. -Raystonn
Well, for your sake: That data is either not aviable or both traders have app. the same stats, except the profits. Happy?