Position size for Futures?

Discussion in 'Strategy Development' started by Not Today, May 29, 2006.

  1. Hi All

    If one has twenty thousand dollars in their cash account,what is a good rule of thumb formula ,for working out how many contracts i can buy.
    And how much does your cash account have to increase before you can add extra contracts to buy?
    I'm talking intra day trading and closing out at close.

    thanks Not Today
  2. lwlee


    Typical positions sizing risks 2%. 20k @2% = $400. If you have a 2 pt stop for the ES, you can trade 4 contracts. ES tick is worth $12.50. With 4 contracts, you can be stopped out at 2pts = $400 loss. If you trade 2 contracts, you can extend the stop to 4 pts.

    Intraday trading, you will mostly likely need a much bigger stop than 2 or 4 pts.
  3. Wrong! The stop has to be in relation to the profit objective, and the win ratio. If I'm daytrading the ES for 1-2 points/trade, I'm not going to have a 4 point stop. If you are truly trading with the market, with an objective of 1-2 points, you should rarely have the market move against you more than 2 points before your profit target is met. Rarely, to me, is in the area of 10% of the time.
  4. lwlee


    Please read his post. He wants to hold till end of day doing intraday trading. There's enough gyration during the day session to require a significant stop size.

  5. Well, I'm not sure that's what he meant. I hope he meant to merely be flat at the end of the day, and not that his intent was to always hold until the close. Because, if that's the case, then he should change his SN from Not Today to Not Ever.
  6. Sorry Yes i did mean to be flat at end of day.( no overnight exposure)

    thanks for the advice

  7. None of the above answers are correct.

    Paper trade until you know what you are doing and you don't have to come on here and ask basic questions.

    Then start with one contract.

    Prove your system.

    And build from there.

    Not trying to be harsh or a smart ass, just trying to save you a lot of dough.


  8. Simex


    I want to extend this thread a bit, if I may.

    The market I trade can take scalp/short term trades of size up to 50-100kUS$ (around 100 contracts). Not very impressive really when a trader is trying to take advantage of an edge.

    Which markets have good movement and can allow a day-trader to flip through with minimal slippage (1 tick) large positions-up to 5mill US$....??

    I've been told to check the Bund. Any others you guys can recommend, with details please?
  9. The highest trading volume futures markets are
    1. Bund
    2. eMINI S&P
    3. BOBL
    4. EuroSTOXX
    5. Schatz
    6. Dax
    7. Euro Currency futures
    8. EURIBOR
    9. Crude Oil
    10. FTSE-100
  10. Simex


    excellent, thanks. In the future I'd like to find out the typical volume at bid/ask, and then the range of tradeable action and compare that with IM....to see the best markets to trade.
    #10     May 30, 2006