Money Management

There are a number of money management issues that we address in Auto Pilot Day Trading trading.

Tick Value

We trade double the number of contracts on the YM and NQ charts as we do on the ES and ER2 charts. This is because the tick values for ER2 ($10) and ES ($12.50) are (approximately) double the YM and NQ tick value ($5) .

Daily Profit and Loss Parameters

Each of our strategies has parameters, which can be optimized, for maximum loss per day and for a profit target per day. For each chart that we trade, when the strategy makes enough profitable trades to reach the profit target for the day, the strategy stops generating entry orders for that day. In the same vein, if the trades go against us, and the maximum loss is reached for that strategy on that chart on that day, the strategy stops generating entry orders for that day. We have found that there are days where the price action just doesn't generate good trades, and on those days we just stop. More often, we reach the profit target, and also stop, because once reached, we would prefer to protect those profits than continue on for a possible smaller profit or even a loss for the day.

Start and Stop Trading Times

Each strategy has a starttime and endtime during market hours, which can also be optimized. In some cases, the bahavior of the market on open is erratic enough, often enough, that the strategy optimizes to a starttime later than the market open time. Similarly, many traders have noticed that it is easy to lose one's profits in the afternoon after doing well in the morning, and our strategies attempt to avoid that loss. Each strategy on each chart begins calling trades at its starttime, and then if it has not already stopped trading because of reaching the max loss or max profit for the day by its endtime, it stops generating new entry orders for the day.