Standard Position Sizing
Guidelines For Determining Your "Standard" Position Size
Here are some (very general) guidelines for determining position sizing. Customize to your needs and personality.
Also, think about this in terms of your "standard" position size. You will want to reduce in times of higher volatility or during a draw-down.
It shouldn't matter if you have $2,000, $200,000, or $2,000,000. Start with no more than 1 or 2 contracts. If you are not making money with 2 contracts, you're certainly not going to make money with 20 contracts.
Aim for trading 1 contract per $5000 in your account. This is recommended for traders with larger accounts. You can still get quality account growth with minimal volatility.
Aim for trading 1 contract per $2500 in your account. This would allow you to trade 4 contracts with as little as $10,000. This position size can lead to steady account growth with limited volatility.
Aim for trading 1 contract per $1250 in your account. This would allow you to trade 4 contracts with as little as $5000. This style is quite feasible if you have a high percentage method. However, it’s not for the inexperienced or the faint of heart. A few losers in a row, which certainly can happen over time, leads to quite a roller coaster ride.
1 contract per $500 in your account. Many brokers allow as little as $500 daytime margin to trade a single ES contract. In other words, you would be allowed to trade 1 contract for every $500 in your account. This would be considered overly aggressive and not recommended.
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