I’ve been shooting for intraday moves, and I’m wondering of those of you who trade intraday, do you trade multiple lots or single lots?
So far I have been trading just single lots, but I’m contemplating going multiple lots because I often find that I can get a 1:1 profit target but after that when I move to breakeven I frequently get stopped out.
My problem with multiple lots is that you always end up diluting your winnings in the end, you take off half your position at 1:1 and then in reality you’re really just getting a 1:0.5 risk reward.
It all has to do with your account size and risk tolerance. Trading style and R:R ratios shouldn’t be used to determine lot size… Well, maybe trading style matters a little, but not much.
Trade whatever lot size equals 2% or less of your account. If you only have a couple hundred bucks you’ll be trading <1 lot, but if you have 10’s of thousands of dollars you’ll trade dozens of lots.
Search the forum for “money management” and you’ll find everything you need to determine your proper lot size.
The attached document might help you develop a framework for thinking about this problem. IIRC some of the calculations are actually wrong, but the approach is sound enough.
when I day trade, I normally stick to just one position / lot. but when I swing trade, sometimes I use multiple positions to help me manage when I want to take profits.
