I like to trade 2 to 3
contracts at a time (especially in the smaller EMINI contract). This allows me to take partial profits when
offered and let part of the position run with the market. Stops are based on
the recent swing lows in the market structure but I normally do not exceed 500
points ($1250 in the S&P and $250 in the ES-MINI).
Money management is basically
the same as with the position trading system.
If after calculating the risk based on the previous swing high or swing
low the dollar risk is to much (or exceeds 500 points), I pass on the trade. I generally make it a point to look for the
lower dollar risk opportunities. Such
as when a critical low was challenged and the market held or was unable to move
significantly below it. I like trades
that offer a logical place for the stop.
When a trade is moving in my favor, I will at times add to positions. Likewise, when a trade is moving against me, if the conditions are right, I will at times exit the entire position and re - establish a position in the opposite direction (occasionally double in size).