Just as you have rules in trading, you should have rules that govern number of contracts traded. You can either limit your risk to a percentage of your account, usually 1 or 2%, or so much margin per contract. For me personally, I prefer to have a minimum of $4000 per contract on the ES, even though my broker requires only $500.
It's interesting; I first went to 3 lots, but soon discovered that it imposed a different exit style. So I went to 4 and now exit in 2s.
so few contracts sould make no material difference in execution. are you increasing because you feel like it or because your account has grown and your risk amount increased?
After a couple of trades I've found that the market absorbs the extra contracts quite readily. There is a definite difference in profit/loss dollar figures per day, but it's something I can live with.
Dude, Just point your finger to the leftfield bleechers and do as many ES as possible all in one shot. Go for the glory!!!
Dude, Just point your finger to the leftfield bleechers and do as many ES as possible all in one shot. Go for the glory!!!
It could be tedious but do type in all your daily p/l to a spreadsheet and analyze your equity changes in details. Make sure you reduce those days you are trading multiple constracts in scale to a single one so that the statistics is consistent. Then figure out your Sharpe ratio and worst drawdown. If possible, do monte carlo simulation on the trades to see the expected return based on your stats. This way you will have the right balance on setting the per contract account size needed. Then size up accordingly. It helps a lot to understand your own trading habits.
Fear of size is merely psychological. You should be able to execute with a 10 (or even a 50) contract default on the S&P minis just as easily as with one contract. Of course you have to stay within the parameters of your money management strategy and ease your way into it, but you must force yourself to use bigger size if you ever want to become comfortable with it. The bottom line is that bigger size (within reason) equals more money if you have a edge. Go for it!
The leverage some brokers allow in the ES is criminal. Trading the ES, particularly for a newbie, with less than 5 to 7k in equity per contract is basically playing russian roulette. I'm sure a lot of you think that is just crazy, and I invite you to say so but please include how long you've been trading this market.
My self imposed margin per position is 20,000 because I like to hold positions overnight and my risk is 1% or $200, which is 4 points in ES. I've been trading ES for over 3 years and off and on for 1.5 years.