Equal weighting vs equal sizing

I setup up a parallel spreadsheet to my tracking that let's me vary the position sizing for the trades that I have performed this month in the TFSA account. That is 63, not including a few others in the swing trading account. Right now my TFSA is down $240, which I am not concerned about as I know why. Between goofy group dynamics and a too large trade gone south drove my profits down.

This parallel setup gives me total net results including commissions and fees and let's me compare my current method of equal weighting against the idea of equal sizing. John pushes the idea of going with larger trades for higher probability setups and smaller with lower probability setups. I can go through and figure this out but I cannot go back and easily do a historical check taking this into account unless I just apply a theoretical fudge factor to account for the possible change in profits.

Naahhhhh.

Current results are, as I said, $240 down on the account. This surprises me a bit but my equal weighting is not going in my favour is all. My average trade size is 2.5 contracts so I will plug that into the results as well.

Equal sizing results are as follows: (every trade the same size)

1 contract: $643 loss, commissions $1379
2 contracts: $26 profit, commissions $1505
2.5 (current average): $361 profit, commissions $1568
3 contracts: $696 profit, commissions $1631
4 contracts: $1366 profit, commissions $1757
5 contracts: $2036 profit, commissions $1883
6 contract: $2706 profit, commissions $2009
7 contracts: $3776 profit, commissions $2135
8 contracts: $4047 profit, commissions $2261
9 contracts: $4717 profit, commissions $2387
10 contracts: $5387 profit, commissions $2513

Obviously getting into equal sixing is a benefit, even at my current average sizing I would have been better off not trying to pick and choose the size to trade. Going with 3 contracts per trade may have meant not being able to place the last trade of a day here and there... but based on my historical trades that would have only been an issue once or twice, if even then as we tend to close trades along the way as well.

This certainly puts the commission cost into perspective. I might look into another avenue sometime but finding a decent broker is going to involve a US based company and therefore no TFSA accounts and a $25,000 minimum account balance (which I will have once I finish transferring my remaining trading cash next week anyway).

So, once I get some more cash in my accounts my next plan is going to be to trade equal sizing, 5 contracts per trade, and starting with the TFSA account and moving to the margin account once that account is full. This may reduce the profits under tax sheltering but may be worth it in the long run just to get larger trades on the go in the TFSA while using the entire capital base as a trading balance allowing the larger trade sizes overall.

The step after that will be to start using stocks instead of options for these trades as there is just plain more flexibility in the trade setups (stops and bracket orders are capable as well as the service moving to stock price based exits for some of the option trades).

Jeff.