cuttshot

This is always a great question to discuss. While there are many ways to increase your position size over time I like to take a very basic approach. I'm willing to risk no more than 3% of my account per trade. I will add size to my trading as I continue to build my account size. It's important to know you market as well. As you continue to build size, you need to make sure you are trading a liquid market. Trading 5 contracts on CL is no problem but trading 25 contracts could lead to some issues. So obviously you will need to put in a cap at some point. Bottom line is I have to keep things simple for myself. Sure you can use other methods out there that can get pretty deep into the numbers but I have to constantly remind myself of the KISS method. If I don't keep it simple I start to lose focus of executing my trade plan. This also means for most of my trading I'm all in and all out. I don't scale in or out of a position. It just makes it too difficult for me on the execution side of things. Not saying this is the best method by any meand. Just what fits my style.

I have traded the TF off and on for the past few years. I have a love hate relationship with this market. I find that when I trade it I need to be on top of my game when it comes to jey level adjustments/stop management. When it's on there isn't a better market out there. When it starts to chop it can be difficult to handle (look at the first few months of 2010). I also like using range charts on the TF. Currently I am trading the 5 range chart (.50). I'm able to get done with most sessions within the first hour of trading. I target 10 or 15 ticks depending on the type of setup it is (I track 2 types of setups). Like tiobingo said it has really come alive lately.

thanks trader will. I will have to take a look at this indicator myself. Is this found in the tradestation user forums?

I would agree. Bernanke speaking is almost guaranteed chop. I'm not expecting anything major out of the fed tomorrow. Rates will be left alone. I'm leaning towards trading a partial position tomorrow during the morning session.

thanks amcan. I completely understand. It can be very difficult to trade both the morning and afternoon sessions. Thats why I try to get done in the morning as much as possible. However, today was another example of why its hard to ignore the afternoon session. Missed another big selloff. I'll just have to continue to look into it.

Amcan I'm kicking myself at the moment because I didn't trade the TF today due to the rebalance. It's so important to trade what you see not what you think. Goes to show the market is so much smarter than me. I can't complain too much because I did have a great morning on the NQ. What are thoughts on the Fed statement tomorrow afternoon? Do you trade the index futures during the morning session? Come back for the afternoon session? Always tricky decisions to make on Fed day.

tiobingo I agree price action/technicals will tell you everything you need to know about a market. I really don't care about the results of an economic release or diving into a companies earnings report because all that matters is the reaction to the news. Reading price action and a few technicals will privide a road map which is all I need.

amcan do you change your time frames/tick intervals for the afternoon session? you said you treat it as a seperate session so i'm curious if you use a completely different system to trade it than you do for the morning session. Do you reduce your size at all? Do you trade the afternoons consistently or every once in a while? I'm still a little iffy on how streaky the afternoons are.

amcan that would make sense. we just haven't seen the big extended moves yet this week. We are just kind of bouncing back and forth (atleast during the morning session). The 1 range is more of a scalping strategy so it can catch the quick moves. Have been trading it with 6 contracts and have run into a few issues getting fills. Thats my main concern at the moment.

Well said amcan. The biggest reason traders fail is due to trading without confidence. The problem is you won't have confidence that your system will recover when it hits a rough stretch. I'm currently sitting with winning percentages between 65-74% right now on the markets I trade. I'm thrilled with the results but even winning 75% of the time means I will have losing trades mixed in and even some losing sessions. Losing trades or losing sessions don't bother me at all because I know long term the odds are in my favor.

Hi Guys...I have been trading crude for most of 2010 and it has fast become one of my favorite markets to trade. Here's my two cents on slippage. I typically will see 1-3 ticks of slippage when I do have it. Lately it hasn't been a big issue for me at all. Occasionally I will see a 4-5 tick slip but it is rare. Inventory report wednesday's can get a little interesting but thats about it. My problem with stop limits on entry is that you will miss trades from time to time. When CL starts moving you won't always get your fill with a stop limit. I hate missing moves on CL so I use stop markets for entry and accept the slippage when it comes. As long as the slippage stays around 1-3 ticks I'm ok with that. If it starts to jump to 4-5 ticks on a regular basis then that changes things and I will need to reevaluate.

Peter, I know your post was a long time ago but I have been looking into binary options here of late and would be interested in any additional details of your trading. From the little research that I have done they have me skeptical. It just seems so much like throwing your bet down on the table and hoping for the best. Atleast when I put a traditional options position on an equity I have the option of adjusting my position. Not quite sure how I feel about the all or nothing aspect of binaries. Don't mean to sound negative here as I don't have a full understanding of these products yet. Any insight would be great.

Anyone have any experience with Trade Monster as an options broker? I have been with thinkorswim for a long time but have been hearing more and more about Trade Monster. With TOS being bought out by TDAmeritrade I'm looking into backup plans in case things do change with the TOS platform. Any thoughts would be appreciated. I'm in the process of opening a small account to test it out. Will post any thoughts as soon as I get some time to play around with the platform.

One of my favorite stocks to trade with options is Apple (AAPL). It had a really nice rally from early March into early May which I played with some call verticals. Price action has been very choppy since the flash crash but I like the way the daily chart is looking. I'm looking to see if it can get a solid close over the swing high at 272.50 or so. If we can get that I'm looking at playing a move to the upside with another vertical call spread. I would be looking for a decent move into earnings. I'm looking at the Aug 270-300 vertical. It's a wide spread and would need the overall market to continue to the upside. For those of you newer to options this trade would be buying the Aug 270 call and selling the 300 call to help finance the trade. Max profit would be the difference between the strikes minus the price paid. Max loss would be the price paid for the spread. Any thoughts on this trade? Any debate on the long call spread opposed to the selling the put spread? Would love to get some options talk going here.

Brian, I know your post was some time ago but it could be a very interesting topic. I have traded equity options for a number of years now but have never done anything with the futures options. I would be very interested to hear about your approach on the floor with these products. I'm curious to know how well some of the common options strategies work on the futures options. Would really appreciate any input you would be willing to give.

Good idea StevenSJC. I'll have to keep an eye on that. My problem is that I don't feel as confident in the afternoon session. I would much rather get things done in the morning so I can focus on my swing trades in the afternoon. However, when the afternoon sessions heat up it's hard to ignore the big moves that we can see as we head into the close.

bttrader, I am on again off again with the afternoon session. The problem I have with it is the lack of consistency. I have found that it will heat up for a period of a couple of weeks and then just completely die off. This makes it difficult to stay consistent with a trade plan. When I do look at the afternoon session on the index futures I like to come back right around 2:00 EST. I typically will look for one nice move. I trade the NQ and TF when I do trade in the afternoon. On the TF I will typically look for a move around 2 points or so. On the NQ it's right around 4 points. If I can catch one win in the afternoon I consider it good. With what we have seen here lately you could also consider the final hour of trading as well. I just don't feel as confident in the afternoon so I try to get in and out as quick as possible.

I know I'm starting to sound like a broken record here but NQ had another great day. 3 more winners for be and 30 ticks of profit. Just off to a great start this week. Tomorrow could be a little difficult with the interest rate statement tomorrow afternoon. I'm leaning towards taking the day off from the index futures.

I think the reason many people struggle with technical analysis is the fact that they over analyze. How many times have you seen people post a chart on a forum that has 10 different indicators working at the same time. Combining multiple indicators doesn't always mean a better result. In fact it can lead to disaster because the more indicators you add will just lead to trying to find a reason not to take a trade. You will be stuck with the paralysis by analysis syndrome. With that being said, technical analysis if used correctly can be a very powerful tool. You just need to keep things simple. Find a few indicators that fit what you are trying to do and then test to make sure they put the odds in your favor. For example being familiar with basic moving averages can definately help put those odds in your favor. Making sure you know how to read price action, support/resistance levels, highs/lows is much more important than any indicator.

After the close on Friday. We could be fine this week yet but why risk it. I'm coming off a really nice stretch on the TF so I don't mind giving it a rest for a few days.

AmCan, Yes I agree price action is king. In fact I like my charts to be very clean. By that I mean very few indicators on them. However, it seems like most trading systems on the market today are a combination of mulitple indicators. You are almost forced to dive in and study some of these indicators to understand what works and what doesn't. As the markets go more and more electronic traders are turning to different technical approaches. It is very important to have a system that you understand and that fits your style.

Systo, save your time. You won't find an autotraded system that will work over a long period of time. The flip a switch and get rich type of a system is just not out there. You are far better off following tj's advice and taking the time to learn how to trade on your own. As far as backtesting goes, I am a big believe in manual backtesting. I could go on and on about why I believe this. The bottom line is you need to learn your system inside and out as well as your given markets. Spending the time to test hundreds of trades manually will teach you how your system will respong in different market conditions. Most importantly it will help build your confidence in your system and market. I can guarantee if you run an automated test and then go right to live trading you will not be able to make confident decisions. You will run into certain tricky situations as time goes on that you will not know what to do with. Bottom line there are no short cuts in this business.

Man May was also a great time for me as well. I traded CL and TF for most of May with really nice results. Also did a little with the EC and NQ which also had great months. Shoot even my swing trading of stocks was profitable. So sell in may and go away was just a myth for me. With everything going on over in Europe and even here in the U.S. I think this summer could actually be decent. We might not see extreme volatility but I don't think we will go into sideways chop on everything either. If you are worried about things slowing down just cut down on your size. I am way overdue for a vacation as well. Too bad I'm just addicted to trading.

Method, The markets that you listed abover are all very volatile markets and you are trying to trade them with smaller account sizes. For me I would rather start with an account size of $12,000-$15,000 on CL and closer to $20,000 on the DAX. With the volatility on these markets just a handful of losing trades or sessions could wipe you out. Not to mention trying to track and trade all these markets can be difficult. My advice to you would be to pick one market and focus on it exclusively. This will lower your exposure to the markets and will also help you learn one market really well. Take crude oil for example. If you go back and look at the last 2 years on this market and did some back testing you would see that you can make a really nice living trading this single market. Everyone seems to think you need to trade multiple markets to be successful and it's just not the case. Any of the markets you listed could be traded alone for really nice results. Worldtrader made a great point that you really do need a trade plan. You have to know where you are getting in and getting out before you ever enter a trade. Otherwise our emotions will get in the way and start telling us to get in or out and the worst possible times. I personally wont trade a market with live funds unless I have a detailed plan in place. This plan must be created and backed by my back testing. I have to be able to show statistics to back up any rule in that I consider adding to that plan. Until you have this in place I wouldn't recommend putting another dime on the line.

I also tried to outsmart the markets on Friday and didn't trade the TF and NQ because of quadruple witching. They both had really nice days of course. I'm thinking the TF is going to be a little difficult this week with the rebalancing on Friday. I agree with AmCan that I might miss out on a great week by not trading it but I would rather preserve capital. Plus with the NQ continuing to trade great my plan is to focus on it this week. 3 winners today for 9 points on the NQ. Done in the first 30 minutes which is always great as well.