I have been daytrading ES and NQ regularly now and I am thinking of ramping up the size of my lot size. I went from a 1 lot trader to a 2 lot trader at the beginning of the year after being a 1 lot trader for 15 months. Now the September contract has just started trading and I'm thinking that now is the time to increase the number again. Do I go to 3 ... 4 ... or 5 contracts. What's the rule of thumb? There will be a period of time before I make the adjustment to the net changes in dollars gained/lost in the account per day. After all it took me probably a month to get used to trading 2 lots Has anybody else made these same adjustments?
the size you are speaking of is totally relative in the emini market. when you are ready to increase, the market is waiting for you. best wishes to you !! surfer
Spreadem, If you are pleased with your consistent performance in trading 1 and 2 lots, then I believe it makes sense to ramp up to 3 lots and then 4; but be prepared to back off to trading 2 lots again if your results begin to suffer. Of course, this needs to be done with the larger context of your account size, risk parameters, trading system, experience, etc. in mind. On the other hand, increasing your lot size just because the September contract has just started trading is probably not prudent. Personally, I have found the adjustment of position size expansion a two-step-forward, one-step-back type of experience; an elastic, albeit steady onward growth with consistency always at the forefront when considering. Kermit
Well, I think The only way you know to increase the lot size, is your reletive rsik to adversion. Take your worst drawdown, multiple be at least 2, if you can handle that and are ok with it, by all means increase to that lot size. Remeber its how you handle the losses that count if your trading successfully, profits will come. The last thing you want to do is trying to increase lot size to fast only to be nervous change your style becauseyour losing, and you might get yourself ina hole thats too big to get out of, i've seen it happen to alot of younger succesfull traders unfortunately.
The reason that I concentrate on the eminis is that the liquidity is there at all times of the day, as opposed to the dow contract. The dow isn't liquid at all times of the day but is getting there.
I personally started out with 1 contract, then got bolder went up to 2. Then when I got a little burned (about 1.5K for 2 trades), I stopped trading and just paper traded, and then resumed with 1 contract. The point I am making, you should trade with as many contracts as you feel comfortable at any given time.
Yes, I noticed that also when I got on a run of losing trades that I had cut back my size of trading from 2 contracts to 1, until I could pull myself out of the drawdown. Also when my confidence grew, I found the transition easier to add positions. With the growth in the account size I could still maintain my risk parameters of 1% per trade. The 1% risk represents a larger dollar amount than before because I'd be trading more contracts. There would be an increase in volume of transactions, thus an increase in commisions. The fact is that the September rollover coincides with the time frame of the goal of my increase in contracts per trade. I had given myself until this time to get ready. I have reach my goals of account growth and win/loss % with relative consistency.
I increased from one to two contracts when my typical loss with one lot didn't bother me. That's when you trade and don't worry about the money. Ditto from two to three lots and so on.