Trading Size

[brownsfan019]

	Quote:	Bfbusa
	... I guess I thought about it too long...

Welcome to the club Bf!! It's always good to review your mechanics and fine tune as needed, but as we all know, your mind can be your own worst enemy at times. It's good to be able to share on a forum like this to get some constructive feedback.

[brownsfan019]

Along the lines of a fixed daily goal and walking away... today I had a long setup on the ES at 10AM EST. I currently have 1/3 of my contracts still running out there. Entry was 1502.25. Current price is 1508. I have no idea if this will continue all day, like yesterday, but if I limited myself to making a certain amount of dollars and quitting, I would be out of this trade already. That would make 2 days in a row of nice running trades that would have been exited prematurely.

So, setting a daily goal and then walking away may sound good in the textbooks, but I would be hard pressed to see the practical use of such a method.

[walterw]

	Quote:	brownsfan019
	Along the lines of a fixed daily goal and walking away... today I had a long setup on the ES at 10AM EST. I currently have 1/3 of my contracts still running out there. Entry was 1502.25. Current price is 1508. I have no idea if this will continue all day, like yesterday, but if I limited myself to making a certain amount of dollars and quitting, I would be out of this trade already. That would make 2 days in a row of nice running trades that would have been exited prematurely. So, setting a daily goal and then walking away may sound good in the textbooks, but I would be hard pressed to see the practical use of such a method.

Brown : I asume your trading style is "daytrading".... if that is the case you need more than one hour of session to get a decent trade completed...

For a "scalper" as I am, a trade may be 2 or 3 min long and your targets for the day may be met... so 1 hour gives you plenty trade oportunities.

So the 1 hour strategy I think is more suited for scalping.... and would not be proper on a day trading style... cheers Walter.

[brownsfan019]

	Quote:	walterw
	Brown : I asume your trading style is "daytrading".... if that is the case you need more than one hour of session to get a decent trade completed... For a "scalper" as I am, a trade may be 2 or 3 min long and your targets for the day may be met... so 1 hour gives you plenty trade oportunities. So the 1 hour strategy I think is more suited for scalping.... and would not be proper on a day trading style... cheers Walter.

I agree Walter. I am a 'daytrader' but not a scalper, that's for sure. All positions are exited by 4:15pm EST.

[BlowFish]

A couple of random but related thoughts. I think there are very few 'regular' businesses that operate like this (finish at monetary target). I don't know of any that give there sales people the remainder of the month of when they have made there monthly goal!

I think it is valuable to set your 'normal' hours of work. Of course one of the great attractions of trading is the freedom and flexibility it affords. Despite this it appears a good idea to have some core guidelines to when you are going to do business, an important part of your trading plan.

It strikes me having a trade working at the close of play is quite similar to a normal business having a 'rush' on or taking an order that needs filling quickly - whatever. Work an extra hour or two and give the staff (you) a bonus or some time off in lieu!

With most of the trade management platforms out there its easy enough to leave a working order with a trailing stop and target. Though that might not suit some peoples style of trade management.

Cheers.

[Bfbusa]

	Quote:	BlowFish
	Glad something positive came out of it. Did you check out that traders calm link about RoR? Cheers.

Yes, Blowfish, thanks for the info.

[DLADLER]

Interesting thread here, I'll ad my .02


"Think to yourself, if you had twice or three times your normal size, I bet you would be darn well sure that the setup you take is the highest probability in your arsenal. You may find yourself not over trading and being alot more disciplined. (Of course you must have a solid trading plan and good setups first.)"

From my experience I have found that it completely depends on the trader. Typically, a trader has some range of contract sizes in which he/she is comfortable trading, ie one guy might trade between 1 and 5 contracts, and another guy might trade between 5 and 50 contracts.

An even more interesting question to pose is, what does your P/L look like when you trade x number of contracts in relation to what it looks like when you trade y number of contracts? Why do you trade the size you trade when you trade it? What makes you want to trade a 10 lot instead of a 5. What is the difference in times when you trade 6 lots and 8 lots, etc... Is it tied to confidence, and are you taking the exact same signals for each size incrememt, or are you rather assigning different lot sizes to different types of trades or market situations?

Have a look at the attached document. I've included examples of 3 different traders. Each trader is a unique story and each shows varying results with different-sized trades.

The left column represents the number of trades he did at that contract size and the right column represents his P/L per contract traded in the designated increment.

The last example shows in addition, the average shape of his trade in each contract size. This graphic shows a view values: profit opportunity (in $), risk taken in the trade (in $), avg. P/L, avg. time in trade.

If I am these traders, I want to find out as much about the instances in which I trade different sized contracts so that I can avoid trading sizes that have traditionally caused losses. For instance, if I have poor performance trading 5-lots, I want to find out as much as possible about my 5-lot trades (why i trade 5's, when i trade 5's, etc...)

[TinGull]

Thanks David. Some real interesting insights you give.

[BigWallStreet]

To answer all the Q's...

There's a time to go big, and time to go small.

BigWallStreet

[brownsfan019]

	Quote:	BigWallStreet
	To answer all the Q's... There's a time to go big, and time to go small. BigWallStreet

Wow, thanks for sharing, very useful. :rolleyes: