i totally agree about dollar goals concentrate on the setups, not the money always but never enter a trade unless the risk (based on stoploss distance * contracts) is commensurate with your account size/risk parameters. the more leveraged (overleveraged) a trader gets, the less likely he is to trade rationally in a liquid contract, there is little practical difference in trading 2 contracts vs. 12 contracts. but on a psychological basis, there is all the difference in the world. not to mention the whole issue of risk of ruin, etc.
I can't address your second Q but here is an answer that covers the # of contracts trading topic from my personal orientation. I began trading contracts by phone before there were minis. I restrict myself to trading in NOW and letting my annotated future move into the present. I use a pipeline analogy. Below, my comments apply to the ES e mini. During trading hours I regard six trading levels in terms of the money velocity. The Money velocity of the market determines your composite contract size (the number you are trading in one action). There is no upper limit at times under four digits. You can note the composite limits on the three charts I will attach that describe money velocity. Four concurrent games are played on the DOM at any given time (except for 20 minutes before FOMC announcenments) and these machinations always indicate the immediate propensity for tick movement and all of the time. I use leading indicators of ES so I have a lot of time for taking action and the level of contracts that are viable is determined in parallel with the timing. I use an "anti- whipsaw" strategy that ensures that when a mistake is made, then , later when the discovery of the mistake is at hand, I correct the mistake and continue with the same composite of contracts in all cases. There is a small profit made when the mistake is corrected and I return to "normal". I train others. They follow a specific regime. No one has the right to trade "money" at the beginning of trading. What gives at trader the right to trade money is his bottom line and only his bottom line and the compounding of capital. Capital is not grown linearly as stated in this thread. (See Austin , et al.) For mental reasons, a person starts with one contract, doubles it and removes his original capital represented by that contract. Then , the person starts again and repeats his first doubling. Moving up in knowledge, skills and experience is not a factor of profits. It is a factor of time passing. Therefore, the person trades with capital at the initial market display view for a month. Then each month, another addition is made to the market display view. This goes on for 6 months to achieve seeing the total market for the first time. Within that period, contracts are added with each doubling: 1, 2, 4 then 5. Capital at that time has moved an order of magnitude. Then, the sequence becomes 5, 10, 20, 25. You can see that an other order of magnitude has been reached at this time. A typical last Monday (yesterday), as observed by those present on a second display view, 7.75 points the first 2 hours and in the pm the total reached on about 6 trades was well over 20 points. When the doubling on 25 is reached then the three charts begin to come into play as a direct function of the money velocity of the pipeline. During low market pace, less than the potential available number of contracts is used. I have ten divisions for the pace distribution based upon 5 minute bars over a month. The distribution varies by the month in various seasons and there is little variation within a season. I use EOD bars (250) to show the variation on five pace levels to demonstrate the seasonal variability. Accounts are sweept weekly (Fridays) and this sets the weekly saw tooth of capital used for margin backing contracts. The IB requirement for margin is different than that used by anyone posting in this thread so far. There are several bariers most people face in being able to become traders. Until these are surpassed, a person is not a trader and will not accumulate capital in the above mentioned exponential manner (See compound interest formula). 1. Predicting. 2. Not knowing the market. 3. Not being able to see the market. 4. Deploying edges and gaming theory to make money. After a person has gopne through adding to the market display view six times and is fluent in the routine of trading (monitoring, analysis, decion making and timely action) they experience an effect that is similar to expert use of sports memory. there are very very few people on ET who trade using sports memory. If you do not understand this post do not worry about it. The OP posted a very very good set of questions and he is not going to get good answers as may be seen. He is making a very astute observation about thousands of posts he has read and, thus, he formulated what he did. Recently (ending yesterday), I have given a run through on how I trade. It was 5 presentations a day for four days. Each presentation is two hours plus or minus about 20 to 30 illustrations each. It will take the attendees 6 months of daily work to get to the point of putting into practice what they were given. I have to dig up the three charts from some power points. I will post them soon. My trading log (4 pages a day) is attached.
what your describing is the epitomy of trading. Once a trader has exposed himself to price action over many many hours and markets. the realization is made when, risk approaches zero. There are points in time in the markets where risk does approach zero, and thats the difference between a trader starting out and someone who has been in the markets for awhile. its similar to flight time for a pilot. Enough flight time needs to be logged so that the trader is exposed to most all situations. even with this the odds are still against you, so the only time extreme size can be used is when risk approaches zero. usually these times are during news events, and when price moves and barriers are broken quickly and retracements are minimal.
This is a handy dandy for knowing what bar you are on during the day. You can color in the money velocity for reference and skill level required.
I agree, and I know the market will teach me a thing or two and take my dollar or two. This is why i am trying to get as much information as I can before I get my trading feet wet. Consequently,I tend to float ideas that my seem irrational, amateurish and dare i say it: moronic,but I assure you they are educational to me and serve a very good purpose.
I appreciate your help even if it is a little bit skewed in its delivery. Funny you should mention Colombia. I still remember very vividly the following phrase: "plomo o plata", I decided to furnish the plata and the guy decided not to gift me with plomo. Not the most fair exchange I have ever completed, but probably the one I was most eager to see the end of asap. Once again, thank you for the education even if it was a little rough around the edges.