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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures
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To: Matthew L. Jones who wrote (39825)11/3/1999 10:13:00 AM
From: Robert Graham   of 44573
 
Whether you trade single or multiple contracts, IMO what is important is being aware of when to make decisions during the execution of a trade. Multiple targets do help provide this framework for this evaluation of a trade in progress.

For that matter, I do not see how risk can be managed any other way with the SPOOs if it were not for the flexibility offered in money management by a multiple contract trade. The market changes from day to day, even from the morning session to the afternoon session. Price action can make not possible what I consider a more regular move to the setup's second price objective. The trader needs to be flexible in this changing environment and alter their approach to trading accordingly. This is done be changing how the trade is managed when the market or particular trade ends up providing a different risk profile. I personally am out to make base hits. But multiple contracts allow me to be in there also for the multiple base hit and the infrequent home run. It is these extended moves that make the market very profitable and worthwhile in risking capital. Base hits are there just to pay the bills. Any profit more than this is icing on the cake. Do not let your system deceive you in how orderly profits can be taken from the market.

I simply do not see how anyone can have long term success in the markets without emphasis being placed on a flexible money management approach to the markets that needs to be used to manage the changing risk of trades in the market. This is also the reason why a mechanical system simply will not work. And also why the flexibility offered by multiple contracts is not a choice, but a necessity.

JMO.

Bob Graham
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