Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I'm so new this probably doesn't answer your question totally.
I trade a $5K account, and I'm comfortable holding 4 MEScontracts at a time. I buy in 1 contract at a time, that way I can judge the move, I will either: 1. take the loss on 1 contract 2. average in (up or down) until I get 4 contracts.
Probably not the smartest way to trade, but in Stocks this has served me very well.
I assume this is asked from the perspective of a new trader in futures. If you're new to futures, I see this question as simply one of risk, and of risk control and limitation.
Hence, the answer I suggest is simply: one. No matter the contract, and no matter your account size, just one.
I would add, if there is a micro contract -- as in the MNQ, which you mentioned -- trade the micro contract, not the full-sized one, and still just one. Especially for the MNQ. (You will find out why soon enough . )
Why? Because futures trading will tear your head off if you aren't used to the leverage and the speed of gains and losses. I would also add, use sufficient margin and have some definite rule or plan about how large a loss you will accept before closing a trade. These are all up to you, but be conservative of your cash and don't let a small loss get big.
There are strategies that can involve multiple contracts, and that may include scaling in (adding contracts) or scaling out (closing parts of a position) based on how the trade works out. If you are new, and if you are asking this question, these may be too tricky. First, be consistently profitable buying low and selling high (or vice-versa), keeping things as simple and as low-risk as possible.
If/when you get more experienced at it, you can increase your size. There is absolutely no hurry to do so.
Keeping your size small is a safety feature in something that is an inherently unsafe activity. To help increase your longevity, you will need to do whatever you can to keep the risk reasonably within your control. Limiting your size will help.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I completely agree with @bobwest's answer.
Trading live should be limited to minimal size (a single contract, or 2 if your strategy calls for partial profit) for quite a while.
Only after demonstrating STABILITY AND CONSISTENCY over time, should you slowly increase your size.
Set a rule for yourself. For example - once 3 months have passed trading a 1-lot, every time you've won 6 of 8 weeks in a row you can raise by one.
You should also have a rule for cutting back - for example: 2 losing weeks in a row I cut back one, and only raise back after winning 2 weeks in a row.