Account Growth Strategies: Option 3

Add 1 contract per X ticks/contract of profit
This method assumes you will add a contract every time you earn a certain number of ticks per contract in profit. It’s slightly complicated, but it’s a very quick way to scale up the number of contracts you’re trading.

Start by determining the number of ticks per contract in profit that you must earn in order to add another contract. 10 to 20 would be very aggressive, 20 to 30 would be moderate, and anything over 30 would be considered conservative.

For example, let’s assume you choose 20 ticks of profit per contract. That means that every time you earn 20 ticks of profit for every contract you’re currently trading, you add another contract.

For this example with 20 ticks/profit/contract, let’s assume you’re trading 4 contracts. When you earn 20 ticks X 4 contracts, or 80 ticks in total profit, you add another contract and start trading 5 contracts. When you earn 20 ticks X 5 contracts, or 100 ticks in total profit, you add another contract and start trading 6 contract. An on it goes…

So, let’s take it from the top.

Let’s say you have are starting with a $5,000 account and you want to start by trading 1 contract per every $2500 in your account. You would start by trading 2 contracts ($5,000 / $2,500 = 2).

Now, let’s assume you’re going to add a contract every time you earn 15 ticks of profit per contract traded. In this case, you would need to earn 15 ticks X the 2 contracts you’re trading, or 30 total ticks (15 ticks X 2 contracts = 30 total ticks).

Once you earn those 30 total ticks, you add another contract and start trading 3 contracts. Now you must earn 45 total ticks (15 ticks X 3 contracts = 45 total ticks).

Once you earn those 45 total ticks, you add another contract and start trading 4 contracts. Now you must earn 60 total ticks (15 ticks X 4 contracts = 60 total ticks).

As you can see from the example above, this is a very quick way to build up your account size. The downsize is that you end up risking an aggressive percentage of your account on each trade in the early stages, especially with an aggressive tick/profit/contract figure like 15.

It can be done, however, as long as you have the discipline to drop the number of contracts traded should you lose enough to drop levels.

For example, in the table above, let’s say you have $7,000 in your account. That means you’re at level 4 and you should trade 5 contracts. Let’s assume you lose $375 on your next trade. That means you now have $6,625. You need to drop down to level 3 and trade 4 contracts until you get back above $6,687.50 and can move up to level 4.