Account Growth Strategies: Option 1
Add 1 contract per X dollars of profit
This is simply a continuation of the method used for determining your starting position size in the previous section. For example, if you have decided to start by using 1 contract per $2500 in your account, simply add a contract every time you earn $2500 in profit.
So, if you’re starting with $10,000 you trade 4 contracts. Once you grow your account to $12,500, you start trading 5 contracts. When you get to $15,000, you start trading 6 contracts, etc.
Of course, if you are to dip below one of these thresholds, you decrease your position size by a contract. Continuing our example from above, if you start the day with $15,200 and then lose $300 on your first trade, you would have less than $15,000 and would decrease from 6 contacts to 5 until you can get your account back above $15,000.
As you can see from the table above, this is a very methodical and reasonable way to grow your account.
The key, from a risk management standpoint, is to have the discipline to drop the number of contracts you’re trading if you fall below the threshold needed to trade a certain number of contracts.
In the example used in the table above, if you have $10,200 in your account, you’re at level 3 and you can trade 4 contracts. Should you lose $300 on your next trade, you would then have a total of $9,900 in your account and you would need to fall back to level 2 and trade just 3 contracts until you get back above the $10,000 threshold.
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