Personnally, would't think of it. One little blip and your are gone! Here's the formula I prefer to trade by: Account balance X Risk (% of capital on each trade) / Largest loss (based on system) = # of contracts. 10,000 X .15 / 400 = 3.75. Trade 4 contracts.
I am just beginning to understand the idea of short term trading of index futures. I would like to know what indicators and what basic trading strategy would be best for a beginner to follow and start paper trading the S&P or Naz index futures. For example, It looks like on 1 or 5 minute chart with a 4 and 8 ema and standard slow stochs, and possibley a williams%r there would be enough of a signal to place trades electronically and gain points and get out or move to the other side. is this possible? if not why,
Chris, I'm trying to understand your formula. You are really risking 15% of your account on each trade? If I risked 2% of my account on a trade by your formula I would have: 10,000 x .02 / 400 = .5 or 1 contract (if you round up). This doesn't make sense to me. Am I interpreting what constitutes your Risk incorrectly (I read the example you gave as you are risking a 15% loss on your account balance on each trade)?
Are you saying they changed the multiplier or abandoned the contract? I seem to remember it started in October, looked @ it for a while but no volume. Are we talking about the same thing?
You are correct. I do not trade the of the 2 - 3% stuff. Cause as you point out, you are very limited as to the number to trade. I use this for scalping, and day trading only. If I feel I would hang on to the trade at the end of the day I will sell off to get me down to about 5 - 7%. My thoughts - If I feel good enough about this trade for 2% then I feel good enough to do 15%. I would not reccommend this to anybody. There is that other thread about beating LW, this is the kind of percentages that LW used to make his year, yes and lose almost half in 3 months!
I am currently using a local broker in Kalispell, Montana. I have been here for over 4 1/2 yrs, but, I will be moving as commissions are way to high. Looking at Expressfutures. Can trade emini for 1100.
They are trading 3 DJIA contracts, - the 2 and 5 are traded only electronic. The 10 is traded only RTH.