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Monday, June 7, 2010

Increasing trade sizing soon

I just cleared 120% ROI on my daytrading since April 1 and my trade size chart indicates that it is already time to go from 4 to 5 contracts per trade. I base this on an 85% participation assuming that there are a maximum of ten trades with an average per contract price of $2.50. Lately it has been a lower average and the trade count has been less than 10 concurrent trades as we are aiming to not have too many on the books at any given time... no more than 10 or 11.

So tomorrow I will add one more contract to the default setting on my platform so that I start the day with 5 contracts on the order windows. In all three of my forecasting models I had June as only a 1 contract increase month.

In the ultra conservative I had 1 per month for 12 months.
In the medium aggressive I had 1 in June, 1 in July and 2 each month thereafter.
In the way out there I have 1 in June, then the progression is 1, 2, 3, 4, 6, 9, 13, bringing me up to the 50 contract maximum.

The first two are just regular increases but the third is progressive based on profits and increasing trade size while keeping account participation above 60% up to the 50 contract sizing.

Then I figured I should use the actual daily averages for the current month in here as that is a more accurate representation of where this aggressive account should expect to be..instead of the arbitrary $250 per day average. I applied a restrictor to keep the increases down to 80% of maximum to avoid increasing too fast and to keep a bit more cash on hand while still planning on regular withdrawals in July.

The new contract count progression is 1 in June, then 2, 3, 5, 8, 12, 19 to the 50 contract maximum. This makes a difference of three months to maximum sizing and starts me off with almost a double withdrawal allowance... $4,400 instead of $2,500 per month.

I will maximize sizing increases and re-forecast the move to get to the largest account base quickly.

Rollin', Rollin' Rollin'....

Jeff.

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