Multi-lot incorporation
January 4, 2006 by Trader Rich
I’m going to start incorporating multi-lots into my trading (in fact, I already have.) I’m not fully sure what my multi lot strategy will end up being but for now I will use a mix of several recommendations. I feel most comfortable trading 3 lots at a time and liquidating lots as targets are hit. The exception may be the 1 remaining lot where I might set a trailing stop from my entry point.
Last night, I went long on the Yen with 3 lots and unfortunately FXCM’s trading platform isn’t very conducive to liquidating multiple lots at various points in time. I’ll use the forex.com trading platform going forward anyway. On a side note, going against the Yen last night has allowed me to regain my edge in Week 5 with a total profit of 236 pips and $1780. Even though I am profitable this week, I must continue to "monitor my susceptibility for making errors" (Douglas) The impulse trading meltdown I had last night will not get me far.
Don’t make the mistake of impulse trading as I did. It’s best to try to remain absolutely emotionally detached from the market. This is something that will take me some time to work on. If you want to see an impulse trading experience first hand, here are my my trades from yesterday evening:
| Date/Time | Pair | Lots | b/s | Open | Close | Pip P/L | $ P/L |
| 2006-01-03 18:20:00 | EUR/USD | 1 | s | 1.2018 | 1.2043 | -25 | $-250 |
| 2006-01-03 19:45:00 | USD/JPY | 1 | b | 116.01 | 115.74 | -27 | $-224.1 |
| 2006-01-03 21:15:00 | USD/JPY | 1 | s | 115.71 | 115.82 | -11 | $-91.3 |
| 2006-01-03 21:24:00 | GBP/JPY | 3 | b | 202.73 | 202.76 | 9 | $74.7 |
| 2006-01-03 21:30:00 | GBP/JPY | 3 | b | 202.81 | 202.76 | -15 | $-124.5 |
| 2006-01-03 21:55:00 | USD/JPY | 3 | b | 115.83 | 115.58 | -75 | $-622.5 |
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First of all, I enjoy reading your blog and wish you success with your goal!
I don’t agree with the multi lot strategy (which seems to me like a means of averaging out). If one has confidence in a trade, then keep it to the limits of your risk/reward tolerance. And if it’s time to get out - then liquidate it all.
Also, because losses obviously will mount 3 times faster (and we can’t escape them!!), unless you have a good deal of capital, these losses will leave more of a psychological effect to your future trading decisions than the extra wins will.
First of all, I enjoy reading your blog and wish you success with your goal!
I don’t agree with the multi lot strategy (which seems to me like a means of averaging out). If one has confidence in a trade, then keep it to the limits of your risk/reward tolerance. And if it’s time to get out - then liquidate it all.
Also, because losses obviously will mount 3 times faster (and we can’t escape them!!), unless you have a good deal of capital, these losses will leave more of a psychological effect to your future trading decisions than the extra wins will.
Uri, thanks for the comment. I actually haven’t acted on the strategy yet. This morning I liquidated a 3 lot position all at once. I tend to agree with you and I’m just going by advice I have read. I’ve been trading for the last 5 weeks 1 lot at once and to be honest, would be more comfortable liquidating all positions at once. I also haven’t been able to find a whole lot in my search on the web for multi lot strategies. Your straightforward approach definately makes sense.
Uri, thanks for the comment. I actually haven’t acted on the strategy yet. This morning I liquidated a 3 lot position all at once. I tend to agree with you and I’m just going by advice I have read. I’ve been trading for the last 5 weeks 1 lot at once and to be honest, would be more comfortable liquidating all positions at once. I also haven’t been able to find a whole lot in my search on the web for multi lot strategies. Your straightforward approach definately makes sense.