Howard Roark 

Based on this and inspiration from that other trader I have indeed considered if I should instead be content with less for the time being. What do you think?

I remember seeing the question of "is it reasonable to make an average of x per day?" (replace x with 1-10 ticks or 30, 50,100 USD or more) a lot in trading.

I see this query as well meaning but ultimately missing the point that, once a trader has been able to achieve a positive result (i.e. a positive expectancy) on, say, 200 live trades or more, they will have reached profitable consistency, by which point they can do whatever they want.

Of course I'm exaggerating and generalizing, but the point for me is, I find it difficult to say "I haven't been able to average X a day, but Y seems more reasonable" (where Y<X) if consistency has not been achieved in the first place.


Not sure whether MFE alone can help identify whether you have an edge but 'roughly breakeven' is usually not bad and, depending on trading style, something that can be built upon.

Howard Roark 

Old thread, but I spoke to a guy who's been trading full-time for 7 years and his only goal for the day is to make 1 point. After that, he's done. He trades 20-30 contracts. That's 30K $ per month gross. I think he said he had 2 or 3 losing days last year. Blew my mind, to be honest. I've considered doing something similar myself: 1) Take 1-2,0 points with maximum leverage 2) Trade the rest of the day with 20% of maximum size.

For demonstration purposes, consider a successful trader (or retired person who's done well for themselves).

consider a $400K account (big but not unheard of in any sense), trading the /ES at $12.50/tick:

Using the formula: Maximum Account Risk (in dollars) / (Trade Risk (in ticks) x Tick Value) = Position Size

$1000 / (4 * 12.50) = 20 contracts per trade risks 0.0025% of the account on any single trade
$2000 / (4 * 12.50) = 40 contracts per trade risks 0.0050%

He/She would need to trade 80 contracts per trade to even risk 0.01% at this level

If they are making $300K+/year using this strategy and it is consistent, I would be scaling up further as liquidity allows or chopping up the trades into sensible liquid blocks. I would also increase the stop size, I would also be really having fun with this

So I think at least from a risk-per-trade standpoint those numbers seem very realistic. EDIT: I didn't mention, I used 4-tick stops in those scenarios which in the /ES will most likely lead to a lot of pain, but imagining 8-tick stops which is what I currently use, then it is more reasonble from both risk AND volatility standpoint. (some will argue this is still too narrow and that opinion is just as valid) I can't speak from a liquidity/execution/fills standpoint as I don't have experience with using this many contracts

Cheers!

Howard Roark 

Care to elaborate? .. Thanks.

ES and its long @$$ queue? no thank! this is NQ illustrations.
pic1) lets say on 35t chart you look left at beginning of the day 4/12 (black vertical line) and identify a potential S/R level (blue line)
pic2) on 10t blue line seems to turn into support level, would you say there is a 1P in there.
pic 3) blue line seems to into resistance, would you say there is 1P trade in there

like others have mentioned, the s/l would be hard to deal with then getting 1 pt.
I personally trade the ES with a 4-5 pt t/p and a 10 pt s/l and in the process of seeing if moving that s/l to 8 pts is better but that a different conversation entirely. I believe that you need to give the market time to move and sometimes you will get bit with that large s/l but its few and far between. Trading max leverage with a goal of 1 pt would be horrible in my view, If you do use a large s/l with such a small profit you will be diffing your self out of the hole a lot. unless your track record with this is in the percentages 80+ then i wouldn't personally trade like that. I would be more concerned with your friends entry signal then hits profit.


-P

cory 

ES and its long @$$ queue? no thank! this is NQ illustrations. pic1) lets say on 35t chart you look left at beginning of the day 4/12 (black vertical line) and identify a potential S/R level (blue line) pic2) on 10t blue line seems to turn into support level, would you say there is a 1P in there. pic 3) blue line seems to into resistance, would you say there is 1P trade in there

Hi, Cory,

I didn't quite follow you. Your profile say your favorite futures is ES.

@$$ queue?

I'm filled instantly trading ES and 'never' have slippage. My maximum size have been 10 contracts though. It probably is different trading 50, but from what I hear - it usually isn't a big deal.

Picture below shows swings of 2,0 points or more. Plenty of opportunity to make 1,0 point on most days in the ES.

xplorer 

I remember seeing the question of "is it reasonable to make an average of x per day?" (replace x with 1-10 ticks or 30, 50,100 USD or more) a lot in trading. I see this query as well meaning but ultimately missing the point that, once a trader has been able to achieve a positive result (i.e. a positive expectancy) on, say, 200 live trades or more, they will have reached profitable consistency, by which point they can do whatever they want. Of course I'm exaggerating and generalizing, but the point for me is, I find it difficult to say "I haven't been able to average X a day, but Y seems more reasonable" (where Y<X) if consistency has not been achieved in the first place.

Well, I'm not sure I can say I agree with that.

Surely it's easier to average 1,0 ES points per day than say taking 5,0 or 10,0 points or say the full offer of the market?

I think it's easier to be consistent taking 1,0 point than taking the full offer each and every day.

Thoughts?

Howard Roark 

Hi, Cory, .... Your profile say your favorite futures is ES. ...

thank for pointing that out, now it read NQ.

cory 

thank for pointing that out, now it read NQ.

I see that now.

I know a lot of people seem to favour NQ over ES, but I've followed ES for so long now that I'm 'married' to it.

Howard Roark 

Well, I'm not sure I can say I agree with that. Surely it's easier to average 1,0 ES points per day than say taking 5,0 or 10,0 points or say the full offer of the market? I think it's easier to be consistent taking 1,0 point than taking the full offer each and every day. Thoughts?

It sounds like I did not explain myself.

Of course, generally speaking, it is easier to shoot for fewer ticks than shoot for more.


So when you say what you said in the quote above, you and I are in agreement.


The question is about consistency.


Just for argument's sake, do you think you would be able to average 1 tick profit a day on ES?

xplorer 

Just for argument's sake, do you think you would be able to average 1 tick profit a day on ES?

Yes.