Thursday, February 21, 2013

Don't try it at home or a 20 contract e-mini futures position

I don't trade big size.

I open my position with 2 contracts (these days it's YM contracts, the contracts of the Dow e-mini futures) and quite often I close it with 2 contracts. Sometimes, I add to this opening position, but even then I rarely go beyond 4 contracts, although I can use 6-10 contracts quite comfortably even if rather rarely.

But anything beyond 10 contracts is very rare, which does not mean that I have never traded size that big. I have and you can see at least one example of that in the current e-mini trading results section on my site. Check the entry under February 12th, and you will see one position with 16 contracts. Still, as I say in that entry, I was quite hesitant to post that screenshot there as it "morally" does not belong there. Due to the size traded and some other reason as well.

And it is also for this reason, a position size well above my normal size, that I chose not to post there the screenshot you can admire below. But I thought I might post it here.  After all, this blog extends what I post on my site.

There are people out there who trade 20 contract lots quite regularly. Or at least that's what they say. You can hear it on trading forums or in trading rooms. Except that this is not always true, a phrase I like to repeat whenever talking about trading forums. The online trading rooms are not too trustworthy either.

I have heard a story, pretty famous just a few years back, about one trading room operator from some infamous vendor business known for a very overpriced product and other dubious business practices, who was "moving" a hundred or so ES contracts, claiming that his room trades were taken in his live trading account. He even had brokerage trading statements to prove it. Well, he was eventually caught lying and his statements were fake. He was trading on a simulator.

I have never traded a hundred contracts, not even half that size, not even on a simulator, so I cannot comment on how it feels. Trading 20 contracts is about all I can take in terms of the risk involved, but if you can do this regularly, congratulations are in order. I know my limitations and I don't think I will ever be trading that much regularly, but I am still doing okay.

You may note, by checking the charts from February 21st, that this 20 contract position could have easily reached a 10 point target that I intended for it, but since I did not have much time left in the trading session, I decided to get out with a smaller profit.

This screenshot goes one day beyond the 3 week record I set up just yesterday as you can, again, see from the current e-mini trading results section.