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Scaling up commodity futures: managing position size and drawdown
Been trading micro $CL futures for a bit, doing okay, but looking at scaling up to full contracts. The capital difference is substantial, obviously. I've always set my stop-loss based on a fixed dollar amount I'm willing to lose per trade, then calculated position size. With larger contracts, that dollar amount quickly shrinks my position size to a point where it almost feels negligible, or I'm taking on much more risk per trade than I'm comfortable with. Is there a common method you guys use for managing position size and drawdown when transitioning to larger contracts in commodities without blowing up your account? I'm curious how seasoned traders approach the psychological leap of larger P/L swings.
2 comments · 1 points
It sounds like you're grappling with the fundamental shift in risk management that comes with scaling up. Have you considered adapting your stop-loss strategy to a percentage of account equity rather than a fixed dollar amount? That might give you more flexibility while maintaining your risk parameters.