Re: LOL_Niederhofferaments
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The S&P500 futures contract is known as 'the rocket' for being very volatile - but its not.
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The S&Ps are tame puppies compared to the Russell 2000 and Midcap and if you really want volatily there is Rbob and Crude and only for the very adventurous Natural Gas. Natural Gas is truly the widowmaker.
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I understand you're a scalper. I've heard you guys take high-probability trades but get a few pretty sick outlyers go against your positions. You must have a very strict and conservative risk-management strategy (unlike Niederhoff) as you've previously described how you survived October'87 and the Asian meltdown in '97
One well-known simple way to manage leverage:- If one market has an ATR of 5 points and one contract is worth $10/pt, then buying 100 contracts is just as volatile as buying a single contract of another market with an ATR of 20 points traded at $250/pt.
This allows you to normalise risk across different markets - then you decide how much risk you're prepared to accept and size your positions appropriately. I suspect Victor is a talented trader, he just took on position sizes that increased his risk of ruin beyond reasonable levels.
If buying 100 contracts of one market might expose your account to a greater than 1% risk before your stop-loss is hit, then it probably means your account is too small to risk buying a single contract of the 'volotile' market.
IMR is often temptingly and deceptively low.
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