100,000% possible in ES futures?

[Ross Spur]

It's also possible that you could start placing random direction trades today and not have a single loser until you die, either by never closing or being very lucky. (Or dying immediately afterwards.)

 

[Doomberg]

good luck!
if the worst does happen, you'll get respect for telling us, unlike the masses who disappear never to be heard from again...

I would advise risking 2% per trade rather than 20% say for the first 50 trades, to prove to yourself, then risk 4% etc if you really want to go higher...

Agreed, 20% trades is how you blow accounts

 

[verbum4it]

This is my problem. We know forex and future trading. What is the different of future and Forex trading? I want to know from the experienced traders. Maybe you can share it for us in Indonesia

 

[DaddyJohn]

This is a serious question, so please try to answer seriously. I'm looking for actual information, even secondhand, rather than speculation.

A little history, to show that I'm not a noob. I started day-trading ES futures, as everyone does, because of the enormous leverage. I started out thinking, "If I can just make 4 points a day, consistently, I will be a millionaire within a year."

Of course, that never happened. I traded a mechanical system that I bought off the Internet, and although it always looked 80-85% profitable on paper, in practice I lost at least 60-70% of the time.

It took my years to figure out how that was possible, during which time I was the textbook definition of insane (as in, I kept doing the same thing over and over, expecting a different result each time). But eventually, after losing consistently for 3 years, and more than $100,000, I realized how stupid I was, and I began from scratch, looking at every move, to see if there were commonalities, patterns - anything.

Fast forward to today, months and hundreds of hours of work later. I have developed a purely mechanical system (okay, there is some judgment, about things I can't properly quantify, such as support and resistance, but which are relatively easy to spot visually) for daytrading the ES that is 90% profitable - that is, it wins 9 times out of every 10 signals. You don't have to believe me - I barely believe it myself - but just assume this is true. The goal is 2 points, and the stop is 2 points. The downside is that there are very few clear, tradeable signals each day - perhaps 3-4 on most days, and sometimes 0-1, so it's mostly a lot of boredom, followed by brief flurries of action and stressing out.

I have traded this system successfully for the past 2 weeks, winning 11 and losing 3 trades (2 of which, incidentally, were mistakes). I trade with a $500 margin, so after 5 wins I gain another contract (if I trade with only the minimum, which I do). I have gone from a start of 2 contracts and $1,000 in equity to 6 contracts and $3,500 in equity, and on Monday I start with 7 contracts.

I don't know what the maximum position is for daytrading ES futures, but my broker states that their largest individual client trades 700 contracts at a time. Based on the liquidity of the trades I've taken, and backtesting the system, I believe that is possible with my system.

Now, here's my question. Starting from 2 contracts and $1,000, with only $500 margin per contract (that increases to $1,000 per contract after 50 contracts, and I think $2,000 per contract after 100 contracts), winning, say, 4 net trades of 2 points/$100 each per week, I calculate that I can compound my way up to 700 contracts and $1,000,000 in equity within a year.

But that would mean my equity grows from $1,000 to $1,000,000, a 1000X increase, or a 100,000% annual return. That seems ridiculous. The most I've ever heard of is Larry Williams, who is famous for making 10,000% in commodities in 1 year (I believe it was properly documented, part of a competition, and duplicated by his daughter - citing Wikipedia).

I know it's possible, in that it's mathematically provable, given the low margins. As far as I can tell, the liquidity is there. My broker assured me, with what I figured was a smirk in her voice, that if I can handle it, and I have the equity, I can trade up to 700 contracts with roughly (she wasn't specific about margins above 100 contracts) the margins indicated above. Let's assume, for argument' sake (I know no one out there believes me) that my system has a 90% win rate, and that I WILL win 4 net 2-point winners per week.

Has anyone ever done this before? Has anyone ever heard of anyone doing this? If this isn't possible, where is the flaw? What will I have to do differently as I increase my trade sizes? Is there an inevitable contract size after which I am psychologically guaranteed to go clinically insane, and blow up my account?

Any answer, again based on actual experience or overheard gossip, is much appreciated.

Hi, I trade ES , FTSE and Eurostoxx. I day trade by scalping and occasionally taking positions for 2- 3 hours. My advice to you is be cautious, scalping is very hard and your system may work for several days and then completely breakdown. It maybe that your system worked when the market was trading in a range, therefore when it trends you will find things different and vice versa.

 

[bkbigfish]

Thanks to everyone for the supportive advice, and to be cautious. That is exactly what I would tell anyone else considering/trading futures (though, honestly, my best advice would be to stay the hell away - even if this works now, it took 3 years and at least $100,000 to get to this point, I had to borrow money from my parents twice to keep going, and there are certainly easier ways of making money, like winning the lottery ).

I'm up to 9 contracts, still eking out my 1 win a day, but I've encountered a potential problem - my broker has a position limit on my account of 9 contracts max. I've requested an increase, but if it's anything other than a formality, it could slow me down.

Then again, 9 contracts on 2 points a day is $900, so even if I'm stuck here for a month, I'm still one happy camper!

And yes, I agree that 20% risked on each trade seems insane. But again, the whole point of switching from stocks to futures was the insane leverage. Isn't that why we all trade them? I mean, let's face it, stocks are a lot easier (I don't mean to say they're easy, just that they're easier than futures).

 

[leonarda]

Thanks to everyone for the supportive advice, and to be cautious. That is exactly what I would tell anyone else considering/trading futures (though, honestly, my best advice would be to stay the hell away - even if this works now, it took 3 years and at least $100,000 to get to this point, I had to borrow money from my parents twice to keep going, and there are certainly easier ways of making money, like winning the lottery ).

I'm up to 9 contracts, still eking out my 1 win a day, but I've encountered a potential problem - my broker has a position limit on my account of 9 contracts max. I've requested an increase, but if it's anything other than a formality, it could slow me down.

Then again, 9 contracts on 2 points a day is $900, so even if I'm stuck here for a month, I'm still one happy camper!

And yes, I agree that 20% risked on each trade seems insane. But again, the whole point of switching from stocks to futures was the insane leverage. Isn't that why we all trade them? I mean, let's face it, stocks are a lot easier (I don't mean to say they're easy, just that they're easier than futures).

wow insane!
so, say hypothetically you get to $100,000, and then get 2 losers in a row, do you think you could handle the emotion/stress of the fact your account has just lost $40,000 in 2 trades?

 

[DionysusToast]

How many trades now, what's your win ratio?

 

[bkbigfish]

Update: I'm up to 10 contracts (I transferred some money out of the account, otherwise I'd be at 12, or even 14), and won 2 trades with 10 contracts ($1,000 each!). My broker raised my limit, subject to equity, to 50 contracts, so no delay there! Let's see, that's 11 winners in a row, and I think the overall count is 3 losses and 16 wins.

It gets easier. Today was a Monday, but because of some other business, I started late, thus missing the first 3 morning trades (all of which were catchable, and won). I skipped the one that formed just as I got up and running (there was no entry anyway). Fortunately, almost immediately I got into another one (kind of lucky, as it only touched my entry price), and won it. I was still nervous, of course, with 10 contracts and $1,000 on the line, but I didn't really doubt that it would win, as I did the first two weeks.

I'll update again when and if I hit 20 contracts, which if everything goes as planned will be this Friday. Since margins are $500 per contract for now, each 5 wins (5 days at 1 win per day) I effectively double the number of contracts.

Which brings me to the question, how would I feel if I lost 2 200-contract trades in a row, losing $40,000? Well, of course I'd feel like crap! BUT as I pointed out, it gets easier, both to properly follow the system - since I gain experience in figuring out the rules faster, and confidence as they lead to winners time and time again - and survive the sudden burst of adrenaline when a trade is on. You eventually get used to almost anything. So, ironically, it's less likely I'll make mistakes as I increase contracts.

Of course, I haven't lost a trade since 5 contracts. I have to keep reminding myself, that if I lose a trade, not to lose my nerve, and to take the next signal, which will 90% win, and recover the loss (that's what you should do, when you're trading a mechanical system)

If I were to lose 2 in a row, I'd feel like crap, yes - but I've felt like crap SO, SO many times before. Before I figured things out, I traded 1 contract, and there were MANY, MANY times I lost 3, 4, or even 5 trades in a row. I've lost $12,000 - out of $30,000 total - on stocks in a single day. That was...numbing. For months.

So I've been there. But the difference would be, that that $12,000 I lost, was $12,000 that I had worked my ass off in my day job and scrimped and saved over months to accumulate - all blown in like 30 minutes of just insanity. If I hit 200 contracts (which would actually be more like $175,000 in equity, as margins increase to $1,000 after 50 contracts), the $40,000 I lose will NOT be money that I slaved over to make - it will be the "casino's money." So I might drop back to, say, 10 or 20 or 50 contracts, for a few trades, to make sure it's still working, and regain my nerve - but I'll recover. And it wasn't my money in the first place, if you see what I mean....

 

[leonarda]

Update: I'm up to 10 contracts (I transferred some money out of the account, otherwise I'd be at 12, or even 14), and won 2 trades with 10 contracts ($1,000 each!). My broker raised my limit, subject to equity, to 50 contracts, so no delay there! Let's see, that's 11 winners in a row, and I think the overall count is 3 losses and 16 wins.

It gets easier. Today was a Monday, but because of some other business, I started late, thus missing the first 3 morning trades (all of which were catchable, and won). I skipped the one that formed just as I got up and running (there was no entry anyway). Fortunately, almost immediately I got into another one (kind of lucky, as it only touched my entry price), and won it. I was still nervous, of course, with 10 contracts and $1,000 on the line, but I didn't really doubt that it would win, as I did the first two weeks.

I'll update again when and if I hit 20 contracts, which if everything goes as planned will be this Friday. Since margins are $500 per contract for now, each 5 wins (5 days at 1 win per day) I effectively double the number of contracts.

Which brings me to the question, how would I feel if I lost 2 200-contract trades in a row, losing $40,000? Well, of course I'd feel like crap! BUT as I pointed out, it gets easier, both to properly follow the system - since I gain experience in figuring out the rules faster, and confidence as they lead to winners time and time again - and survive the sudden burst of adrenaline when a trade is on. You eventually get used to almost anything. So, ironically, it's less likely I'll make mistakes as I increase contracts.

Of course, I haven't lost a trade since 5 contracts. I have to keep reminding myself, that if I lose a trade, not to lose my nerve, and to take the next signal, which will 90% win, and recover the loss (that's what you should do, when you're trading a mechanical system)

If I were to lose 2 in a row, I'd feel like crap, yes - but I've felt like crap SO, SO many times before. Before I figured things out, I traded 1 contract, and there were MANY, MANY times I lost 3, 4, or even 5 trades in a row. I've lost $12,000 - out of $30,000 total - on stocks in a single day. That was...numbing. For months.

So I've been there. But the difference would be, that that $12,000 I lost, was $12,000 that I had worked my ass off in my day job and scrimped and saved over months to accumulate - all blown in like 30 minutes of just insanity. If I hit 200 contracts (which would actually be more like $175,000 in equity, as margins increase to $1,000 after 50 contracts), the $40,000 I lose will NOT be money that I slaved over to make - it will be the "casino's money." So I might drop back to, say, 10 or 20 or 50 contracts, for a few trades, to make sure it's still working, and regain my nerve - but I'll recover. And it wasn't my money in the first place, if you see what I mean....

good luck with this, but remember that with a 10% chance of a loser you will get 2 losers in a row within about the next 100 trades.

 

[Michael8667]

Update: I'm up to 10 contracts (I transferred some money out of the account, otherwise I'd be at 12, or even 14), and won 2 trades with 10 contracts ($1,000 each!). My broker raised my limit, subject to equity, to 50 contracts, so no delay there! Let's see, that's 11 winners in a row, and I think the overall count is 3 losses and 16 wins.

It gets easier. Today was a Monday, but because of some other business, I started late, thus missing the first 3 morning trades (all of which were catchable, and won). I skipped the one that formed just as I got up and running (there was no entry anyway). Fortunately, almost immediately I got into another one (kind of lucky, as it only touched my entry price), and won it. I was still nervous, of course, with 10 contracts and $1,000 on the line, but I didn't really doubt that it would win, as I did the first two weeks.

I'll update again when and if I hit 20 contracts, which if everything goes as planned will be this Friday. Since margins are $500 per contract for now, each 5 wins (5 days at 1 win per day) I effectively double the number of contracts.

Which brings me to the question, how would I feel if I lost 2 200-contract trades in a row, losing $40,000? Well, of course I'd feel like crap! BUT as I pointed out, it gets easier, both to properly follow the system - since I gain experience in figuring out the rules faster, and confidence as they lead to winners time and time again - and survive the sudden burst of adrenaline when a trade is on. You eventually get used to almost anything. So, ironically, it's less likely I'll make mistakes as I increase contracts.

Of course, I haven't lost a trade since 5 contracts. I have to keep reminding myself, that if I lose a trade, not to lose my nerve, and to take the next signal, which will 90% win, and recover the loss (that's what you should do, when you're trading a mechanical system)

If I were to lose 2 in a row, I'd feel like crap, yes - but I've felt like crap SO, SO many times before. Before I figured things out, I traded 1 contract, and there were MANY, MANY times I lost 3, 4, or even 5 trades in a row. I've lost $12,000 - out of $30,000 total - on stocks in a single day. That was...numbing. For months.

So I've been there. But the difference would be, that that $12,000 I lost, was $12,000 that I had worked my ass off in my day job and scrimped and saved over months to accumulate - all blown in like 30 minutes of just insanity. If I hit 200 contracts (which would actually be more like $175,000 in equity, as margins increase to $1,000 after 50 contracts), the $40,000 I lose will NOT be money that I slaved over to make - it will be the "casino's money." So I might drop back to, say, 10 or 20 or 50 contracts, for a few trades, to make sure it's still working, and regain my nerve - but I'll recover. And it wasn't my money in the first place, if you see what I mean....

Good luck

You should start a Journal like myself I trade the ES but with a more money management wise approach. I know that losses arises at unexpected times and hence my win to lose ratio is 3:1. I take profit at 18 ticks and stop out at 6.

I started a screenshot Journal just incase anyone on here doubts my trades. Have a look here: http://www.trade2win.com/boards/trading-journals/125294-mrkmcknz-screenshot-journal.html

 

[bkbigfish]

Update:

I hit 14 winners in a row, and reached 20 contracts today. Then, horror of horrors, I lost one! I was numb for a bit, but fortunately I jumped right back in - and won the next 2. So I'm up $2,000 for the day, minus commissions (which start to add up, by the way), and up from 10 to 20 contracts for the week, making, let's see, $7300 after commissions. Not a bad week!

So it can be done. I worried about the psychology of it, back when I was winning and losing about evenly, whether I could stand losing trades. Well, it does get easier - at 20 contracts, that's $250 per tick, but the whole time, for all 3 trades, I was more focused on whether the trades were right or not, not on the enormous value of each tick.

I think I'll stop my entries here, for three reasons. First, the past 4 weeks have shown me without a doubt that I'm right, that this is a winning system. I've never been past 5 contracts before, and now I'm up to 20. Barring an act of God (like, say, the world ending May 21, ha ha), I WILL answer the question I posed here, affirmatively.

Second, I don't want to seem like I'm bragging. I mean, I kind of am, in the sense that, even though I'm making more money than I ever have, it's all just numbers on a screen, and I'm doing it all just by clicking some buttons. It doesn't feel real, which is why I posed the question in the first place, and why I felt the need to post here so voluminously. It still feels somewhat unreal, but I don't think any purpose can be served by posting more. In any case, it'll just be things like "up to 40 contracts" or "made $50,000 today," which is just bragging, and in bad taste.

Third, I've thought a lot about it, and frankly, I don't want to encourage other people to trade futures. Go with me on this for a second. I've reached the Promised Land, but even I have to recognize that it wasn't worth it. I isolated myself for three years to get here, from both family and friends, obsessively trading and thinking and plotting and planning. I had to borrow money from my parents twice, and the second time I lied to them about why. I felt like a loser and a failure constantly. My lack of a steady future even led my dad into a horrible business venture, that he started with the express purpose of guilting me into a steady job (he lost almost a million dollars on it).

Before I discovered futures, I was doing fine with stocks, not making a killing, but enough to live on and slowly grow equity. So if I had stuck with stocks, I'd've lived comfortably, not isolated myself, enjoyed my life, and still been somewhat rich by now - for the last three years. I've missed countless birthdays, weddings, and holiday gatherings. I couldn't even discuss my futures with anyone else, because no one was interested - stocks people can understand, but even today hardly anyone in my family even understands what an equity index future is. I've lost 3 years of good living, 3 years in which I scrimped and saved, slowly (or sometimes quickly) losing money to other futures traders. And it was entirely possible this would've gone on for years more - I got lucky with a couple of accidents, that finally led me to the right system. Without those accidents, who knows how long it would have taken? I recognize, for one thing, that my personality fits stocks a lot better than futures (longer time frame, bigger wins than losses, smaller leverage), and futures will never quite feel as "right" to me as stocks did.

So, though it sounds selfish, and even hypocritical, I encourage everyone who is considering trading futures, or a beginner, to reconsider. There are many, many ways to make money, and though futures SEEM easier and faster, they are MUCH harder to learn than stocks, or poker, or computer programming - and MUCH harder than you think they will be. If you MUST trade, consider stocks instead - they're slower, sure, but for that reason they're a lot easier psychologically. Even today, looking back, I wish I had.

 

[Michael8667]

Update:

I hit 14 winners in a row, and reached 20 contracts today. Then, horror of horrors, I lost one! I was numb for a bit, but fortunately I jumped right back in - and won the next 2. So I'm up $2,000 for the day, minus commissions (which start to add up, by the way), and up from 10 to 20 contracts for the week, making, let's see, $7300 after commissions. Not a bad week!

So it can be done. I worried about the psychology of it, back when I was winning and losing about evenly, whether I could stand losing trades. Well, it does get easier - at 20 contracts, that's $250 per tick, but the whole time, for all 3 trades, I was more focused on whether the trades were right or not, not on the enormous value of each tick.

I think I'll stop my entries here, for three reasons. First, the past 4 weeks have shown me without a doubt that I'm right, that this is a winning system. I've never been past 5 contracts before, and now I'm up to 20. Barring an act of God (like, say, the world ending May 21, ha ha), I WILL answer the question I posed here, affirmatively.

Second, I don't want to seem like I'm bragging. I mean, I kind of am, in the sense that, even though I'm making more money than I ever have, it's all just numbers on a screen, and I'm doing it all just by clicking some buttons. It doesn't feel real, which is why I posed the question in the first place, and why I felt the need to post here so voluminously. It still feels somewhat unreal, but I don't think any purpose can be served by posting more. In any case, it'll just be things like "up to 40 contracts" or "made $50,000 today," which is just bragging, and in bad taste.

Third, I've thought a lot about it, and frankly, I don't want to encourage other people to trade futures. Go with me on this for a second. I've reached the Promised Land, but even I have to recognize that it wasn't worth it. I isolated myself for three years to get here, from both family and friends, obsessively trading and thinking and plotting and planning. I had to borrow money from my parents twice, and the second time I lied to them about why. I felt like a loser and a failure constantly. My lack of a steady future even led my dad into a horrible business venture, that he started with the express purpose of guilting me into a steady job (he lost almost a million dollars on it).

Before I discovered futures, I was doing fine with stocks, not making a killing, but enough to live on and slowly grow equity. So if I had stuck with stocks, I'd've lived comfortably, not isolated myself, enjoyed my life, and still been somewhat rich by now - for the last three years. I've missed countless birthdays, weddings, and holiday gatherings. I couldn't even discuss my futures with anyone else, because no one was interested - stocks people can understand, but even today hardly anyone in my family even understands what an equity index future is. I've lost 3 years of good living, 3 years in which I scrimped and saved, slowly (or sometimes quickly) losing money to other futures traders. And it was entirely possible this would've gone on for years more - I got lucky with a couple of accidents, that finally led me to the right system. Without those accidents, who knows how long it would have taken? I recognize, for one thing, that my personality fits stocks a lot better than futures (longer time frame, bigger wins than losses, smaller leverage), and futures will never quite feel as "right" to me as stocks did.

So, though it sounds selfish, and even hypocritical, I encourage everyone who is considering trading futures, or a beginner, to reconsider. There are many, many ways to make money, and though futures SEEM easier and faster, they are MUCH harder to learn than stocks, or poker, or computer programming - and MUCH harder than you think they will be. If you MUST trade, consider stocks instead - they're slower, sure, but for that reason they're a lot easier psychologically. Even today, looking back, I wish I had.

How were you day trading without $25,000 in an account?

 

[Michael8667]

You said:

Each loss is 20% of my account

You also said:

8ticks take profit and 8ticks stop loss.

Assuming you have a $500 day trade margin on 20 contracts that is $10,000.

$250 a tick means for every win/loss the net gain or loss is $2000.

Meaning at the start of the day you would have had $20,000 in your account.

You are a pattern day trader and thus you don't have the capital requirements.

I think you are either demo trading of which I have nothing against. Or simply inflating your ego of which I think you are.

I get the feeling you have reached a stage where you think you have the ultimate trading system.

You don't.

For one reason. Trading an 8tick system with 700 contracts is a joke. You would make market noise and would maybe struggle to have this filled at your price. If you don't believe me read this:

www.businessperspectives.org/journals.../imfi_en_2007_04_1_Wang.pdf

Congrats on success but unless you tune your aspirations down you will lose it turning your system into a losing one chasing that $1million.

 

[pboyles]

What has pattern day trading got to do with futures? Having said that you're pretty much right about everything else. 100,000% is about as likely as walking on the moon, possible but it's really not going to happen.

 

[Michael8667]

What has pattern day trading got to do with futures? Having said that you're pretty much right about everything else. 100,000% is about as likely as walking on the moon, possible but it's really not going to happen.

Apologies I initially didn't know the OP was day trading futures.

My mistake entirely.

Admitting to mistakes isn't what traders do best