Just curious to see how many people trade this large for a living. If you do, or close to it, how did you end up trading so large? It would be great to hear some success stories of those who started with one contract and grew it up to 50, and what money management principles you used to achieve such a nice amount of contracts at one time to trade with on a daily basis. Thanks!
ES will gobble up your 50 lot in a NY second so no need to worry bout liquidity.....large lot size should be,atleast to me,reserved for extreme movements & only when R/R is heavily skewed in your favor or when all indicators are screaming size & lining up accordingly....stay away from intra day noise & hard stops because they will find you.
I manage for clients and trade on avg 200-300 contracts per position(block allocation trades), sometimes thru one large trade and sometimes broken up into 3-5 trades depending on the time of day and/or volume, econ news events, etc. ES is very liquid, generally speaking, unless you are in after hours session in which case you need to be a bit careful about liquidity/spreads if you are trading anything over 30-50 During main market session, generally speaking, If you are trading between 1 and 25 contracts you have absolutely nothing to worry about. Your fills are quick. I also trade euro futures(6E), and pound futures (6b), never had a problem with large size with them either. Although i do have more instances of breaking up my orders on 6e and 6b into multiple ones bcuz they arent quite as liquid as the ES. Anyone else who trades large size futures wish to chime in on this subject?
I won't even mention how small the size I trade in is but suffice to say I hope to trade my first 5 lot in 2012. Yet I think my volume is not relevant to my comment. It seems to me that to say that the Euro and Cable are "not quite as liquid as ES" is the understatement of the decade! Unless my perception of these markets is truly skewed (and my math skills nonexistent) it is safe to say that there is no way to compare CME currencies -- as opposed to the real interbank market -- to ES. Simply totally different orders of magnitude. Just look at time and sales for the answer. BTW ... I don't think the OP was asking about liquidity. He seems to want to be reassured that big independent traders are here on ET. Maybe someone can answer that for him.
50 contracts is not a lot of contracts for RTH on the ES. My max position size is 50 contracts but I trade intraday and trade 5 linked accounts and seek to reduce risk via position reduction ASAP. As volatility contracts position size can be increased without incurring additional monetary risk. As volatility increases one must reduce position size but that will not decrease profit potential due to the increased point range. Only educators will tell you not to focus on the money because money is the only reason to trade(IMNSHO) and money is what keeps you able to trade. I operate with a 1.5 pt hard stop on the ES so if and when I have 50 contracts on a trade my risk is $3750. Your max tolerable risk per full stop out should determine how many contracts you trade IMO. Sooooo...if you use a 2 pt stop and your max tolerable loss on a full stop out is $2000 then you should trade no more than 20 contracts and so on and so forth. Always value what have over what it is you seek to gain. Increase size as your account and skill level grows. In the ES money is made by increasing size using methods that already produce consistent results. During RTH 50 contracts are filled as easily as 5 contracts on the ES. I never traded only 1 contract on the ES but used to trade only 1 contract on the old ER2. 5 contracts is very good money to make a living off of my friend.
JustDoingIt.. i like your approach. good post. What is your profit target for each trade ? How many of these max 50 lot trades do you make per day? What is you avg contract size per trade? How long trading this size? thanks.
My target is ALWAYS 2R at minimum but I work behind price and lock in profits so that momentum can increase my profit potential without taking on additional risk. I have predetermined action zones to get in and get out of a trade before entry but prevailing price action dictates how trades are actively managed. I use buy stops or sell stops 90+% of the time so that I am not tempted to fight momentum but to use it as an ally and it also helps to reduce missed trade opportunities because a limit order didn't get filled. I will usually do no more than 2 max size trades per day(50 lots) and they will always be before lunch so that I will have time to recover if and when I take a full stop on the trade. Max size criteria is very stringent and usually is reserved for fading gaps into support or resistance. My average contract size is now 30 contracts and it has been at this level for the past 16 months. I would have probably increased to 50 as my average by now but a considerable portion of the accounts are devoted to doing call/put spreads on the indexes as well so margin requirements are hampering the next step up in size. Once you get a certain amount of money...you have much more to lose than to gain. Larger accounts seek predictability...smaller accounts seek volatility.