I know this will vary depending upon instrument traded, but can u give rough estimate of how many contracts someone would normally trade, using good money management, if trading spreads using the APEX method on a per $5000 account size?
I watched the video on 5%/day goal, but just wondering what is the average number of contracts someone would trade on say CL for example, or ES (on a $5K account). (based on stop loss risk from E entry to initial P stop area)
If you are risking say 5% $250 - at say $50 a trade and the risk is say $25 for 1 contract that would be 2 contracts
If the the risk is $13 per trade on a $1600 account what kind of binaries would I trade. Sell strikes with a $13 price? That would make my max loss at $87. But I would cut loss to $50 if it comes back to hit strike? Am I tracking you right on that? (EPC trades?)
You would have to risk more % due to your account size. Loss would not be 50 loss would be 37 if you sold say at 13. More detail on original question posted.
Answered question here: http://apexinvesting.net/forum/risk-tolerance-43/risk-management-648.html
Hi Darrell,
Re: the 5% goal - I was doing a spreadsheet on it for Nadex. Trying to figure out how many ticks I would need to make and how many contracts. I have a $5000 account and goal is 5% a day, $250. That 250 is alot of Nadex $1 ticks! Just starting out, learning spreads, staying in one market, I don’t see how I can make 250 ticks a day in Nadex. So I thought I could start with the goal of 5% of $1000 and that would be $50. In this case what do you recommend as far as number of contracts to trade and goal for number of ticks daily? Ex: 2 contracts for 25 ticks?
But to keep your 5% going in the following months you would have to double the number of contracts you trade every month, if your goal was still 25 ticks in Nadex. Is that a realistic goal ? I did my spreadsheet and wanted to be conservative, so I figured 5% for 15 days a month, 25 ticks a day, by month 6 I would have to be trading 33 contracts! Is that realistic or even possible? and is it possible just trading in one or two markets?
Also you say to follow the system and take everytrade…how do you look at this from a Nadex perspective. Would that mean you find a spread for every E entry and follow each of them through all of the APEX stops?
I really want to know how I can make a plan to accomplish the 5% a day goal.
5% rule # of contracts/trades etc…
The 5% rule is more about risk management than anything. This is done on elite so you can ensure that it would take 6 losing trades in order to be knocked out for the day. Also it is done to ensure you don’t wipe out your account by over risking it. It is also about ensuring you don’t make a lot and give it all back by stopping when up 5%.
Yes that means taking each E and putting the stop and trailing stops… hence you can have multiple trades on at the same time - ie several positions open at one time so you would be making more than $1.00 a tick ie you have 5 positions open as you kept adding in. You don’t need to capture a 250 tick move (agreed a 250 tick move on 1 contract would be rare and difficult).
Most days you should not hit the 5% goal on the risk side.
Ideally you hit it on the profit side but may not hit a total of 5% on it as well. Some days you will hit it - some days you will exceed it depending on the day and the strategies used.
Combing more strategies can help with this (ie doing some butterflies on news or straddles/strangles on news.
Premium collection trades (you an make $25 if the market does not even move).
Expiration trend collection (like EPC but inverted) can have high payouts on a short move in a short time etc…
But first master one strategy get it down. Don’t worry about making 5% a day worry about trading well. As you master each strategy/system you can add to the plays in your playbook to make this easier. This is similar to what you are doing with the $1,000. Though with that you have the issue of now dividing 5% of 1000 by 6 so its not really helping you.
Don’t get stuck on the 5% of profit… Risk management is what this is about. Profit has a good tendency to take care of itself when risk management is in check.
Doubled
You are correct if you doubled your account you would double the contracts entered (ie the following month). This is realistic up to a point. At that point you should not be to concerned about it as y ou can also diversify into multiple instruments and strategies. This is often a concern (doubling up every month) of traders just beginning don’t worry about it till it actually is a problem By that time you are making a lot of money consistently note you are also pulling money out of the market so its not like you just keep doubling and keeping the money you do make withdrawals and by that time you can handle more markets and more strategies so you are not putting as much on every single trade as you are doing more. Don’t try to “eat the whole cow at one time” let that be a problem later… and its a good problem to have. When that is the problem let me know and we can work on your plan from there.
If you have 5k and do 5% / 6 that is 41 - most markets you risk about 26 on spreads. So you may decide to risk a little over 5% so you can stick with the 6 trade rule. ie 6 x 25 x 2 = 312 = .06% of 5k
You can do 2 markets or you can do double the contracts.
Where to Start Your plan to start is master the system learn some style master execution of the trades and spread selection. Do this on one market doing the elite strategy. Once you have that down increase contracts or markets.Then from there you can even start doing binaries for elite, adding on EPC trades, doing butterflies, straddles and strangles. But you need to master 1 at a time. And don’t expect to hit the 5% daily or when you first start. One bite at a time…