1) you will use a 1 pt (4 ES ticks) stop. Un-realisitic. 2) You have capped daily profit potential at 20 ES ticks. Why? 3) You have failed to define a maximum daily loss potential. 1-2% of account value is un-realistic with small(ish) accounts. Day 1 opening bell, 5k account. Day 1, trade 1, 4 ES tick+1 tick slippage+commish loser. You are done with your trading career, account value is less than 5k... Your rule, not mine. Maybe you should focus on the tiers at which you will add size. :eek: Osorico
Why is 1 point stop unrealistic? I have met alot of traders who use 1 point stop very succesfully. What do you use? Do you trade real money?
You mentioned a profit target, but you didn't mention a risk-shutdown target, the point at which you stop trading for the day because your losses have hit a certain point. Mine is 3% of my account, which is larger than yours. You can figure out that my risk/trade is much less than 2% of my account. So you're going to trade with a 4 tick stop in these markets, right? Wow, your entries must be incredibly accurate. In the past week I've found that a 4-tick stop is well within the noise range, unless you are micro-scalping, but I somehow doubt that's what you're doing. One thing is clear from your posts - you don't understand that you are going to lose money at first. -------------------------------------------------------------------------- EDIT: missed osorico's post above which says basically the same thing.
Which is fine, theres lots of that. What is your plan? Stops, Profit Targets(per trade, per day), Max loss per day. Average actual profit per day, per month?, Part time, full time trader?
As I said above, my max loss per day is 3% of my total account size. I have no 'profit target' per day. I sometimes leg out of positions. All stops are determined by prevailing market conditions. These days in the ES the initial risk stop is a hell of a lot more than 4 ticks, but that's irrelevant. You're asking me what my stops are but you have no idea what my trading style is - that doesn't make sense. A 30 tick stop could be too tight and a 4 tick stop could be too wide, it all depends. The strangest question you asked is about 'average profit'. What on earth does my average profit have to do with your trading plan?? You're looking for canned answers and they don't exist. If the large majority of new ES traders are likely to lose at first, we can tell by your questions that you are overwhelmingly likely to lose. Believe it or not, this is not meant to discourage you - it is meant to jolt you into reality, but I can already tell that it probably won't work. You're going to get a nice jolt when you enter the markets and lose. That's the only way for you to answer your questions - to figure out what works for you given your unique situation vis-a-vis net worth, trading style, psychology, preparation, commission structure, etc.
I only trade sim. I use a calendar to game the system so I never have to pay to trade sim. I have opened sim accounts at every broker that offers. We even exchange Holiday pleasantries. I also have a dedicated telco land-line just for my sim trading. Soooo, it doesn't matter what I use for a stop, if I put on a stop at all... Which is more useful and realistic than a 1 pt (4 ES tick) stop. Osorico
EminitraderDM, everyone has their own risk tolerance and risk management methods - you need to figure out what fits yours. A few weeks of sim trading does not a trader make. Many traders with years experience lose their ass too - it's the nature of the biz. You should strive for perfect practice in your sim trades and dwell more on entries and managing your trades. Usually, that takes months or years to perfect. For example, assume you have a $1500 account......... Set your max position for any one trade for, say, 3 contracts and your max loss for the day at $150.00 (10%)............now, keep written logs and do not cheat even one iota and see how you do! Let us know how you do. Best to you! Steve
My biggest problem with traders is that everyone has big mouths when in comes to advice but when it comes to actual results they dont exist. Im in real estate, arguably the toughest busines to make a dime, and when you make as much money as i have the chances are 1 in millions and millions. So when it comes to the odds being stacked against me im all to farmiliar. Im 19 years old. I do however understand that your trading targets for any given day are based on the market conditons for the particular day, hour, minute, second. Ive been watching the markets for months and realise that! However, no matter how good or bad the results. I dont care how many times people dance around the questions like a sleezy politicans...EVERY TRADER has average results throughout the weeks, months, and years. Otherwise you wouldnt do it...