Right now, I am roughly +$500 for the year. This is with aggressive position sizing - adding on to profitable positions quite a bit, and sometimes opening with 2x the baseline number of contracts. Most of the time, I am close to being margined out (ie, I can't add any more positions). Again, I do this just for the contest account - I do NOT recommend doing this in your accounts.
Interestingly, if I had done nothing but single contract position sizing with the 15 trades I have taken thus far (10 closed, 5 still open), I'd be up around $2975 right now.
That means my position sizing has thus far cost me almost $2500.
This is intriguing, since many people just look at entries and exits as being important. They certainly are important, but so is position sizing and trade management.
This is one reason I caution clients to not include position sizing in their baseline strategy results. Position sizing can obscure or even eliminate whatever edge your entries and exits might provide. So, I recommend calculating strategy performance for 1 contract always, then later on applying position sizing.
I'll revisit this as time goes on, but for now, fixed position sizing is winning.
As always, comments and questions are encouraged.
Looks like the markets that you are trading with the selected system are not trending. With aggressive position sizing, I am sure once the markets starts to move, your profits will explode exponentially.
ReplyDeleteThanks for the comment. It is kind of a mixed bag now - some really good trends, some flat markets. Although this particular system I am trading is unique to the contest, similar systems I have traded are the same way - many trades have small gains or losses, and then a few trades have really nice gains.
ReplyDeleteI do think if I can get a few nice trends, I can add aggressively and make a move up. The key, in my mind, is for me to be patient with this "adding to winners" type approach. It can easily backfire.
ReplyDeleteBy the way, you have won previous contests, is this system a modification or improved version of those used previously?
ReplyDeleteDifferent. I still the trade the system I won the contest in, in another account.
ReplyDeleteThe system I am using for this year's contest is new, and specifically designed for the low account starting balance ($10,000).
All together, I am trading 10 different systems with real money. Right now, the contest system happens to be one of the worst performers in 2012 (go figure!). Overall though I am having a really good 2012 so far.
Talking about trade management, do you monitor your positions after they are triggered and tighten your stop loss or take partial profits? Are there any recommended way of managing your trades?
ReplyDeleteNo tightening on stops, and no taking of partial profits.
ReplyDeleteThat is not to say that those are not good ideas, it is just that I do not do them with this particular system.
The best way to manage your trades is to develop an idea, test it via walkforward and/or out of sample testing, then watch it live for a while (recording all trades), and if it passes all these tests, then trade it with real money.