Hello everyone,
I’m currently facing a challenge when coding strategies for Micro Futures (MESXXXX, DXSXXXX, MNQXXXX, MGCXXXX, etc) on higher timeframes like 30-minute, 1-hour, and 4-hour charts, and I wanted to reach out to the community to see how others might be dealing with similar issues.
The Problem:
I have a limited capital of $2000 available per strategy, and I’m using a dynamic stop loss based on the Average True Range (ATR). The issue arises because the ATR on these timeframes is often too large, causing the stop loss to be set quite far from the entry point, which results in significant risk exposure for my account. This makes it difficult to maintain proper risk management while still adhering to my strategy, which usually is 1% if the account per trade.
What I’ve Tried:
Using microcontracts: I’m trading futures but still finding that even microcontracts can sometimes result in a larger stop loss than I’m comfortable with due to the volatility on higher timeframes.ATR scaling: I’ve tried adjusting the multiplier for the ATR stop loss (e.g., reducing it from 2x to 1x), but it still doesn’t seem to balance the risk properly.
My Question:
How do you all manage dynamic stop losses based on ATR when trading with a limited account size, especially on higher timeframes? Do you scale down the ATR multiplier further, or do you have other techniques for reducing the size of the stop loss? Or perhaps you use different instruments (like ETFs or CFDs) for this kind of trading?
I’d love to hear how others handle similar situations, especially in terms of position sizing and risk management with a limited account.
Looking forward to your insights and strategies!
Thanks!
.
