One strategy that allows flexibility in improving profitability is position sizing when trading mini Dow contracts.
Managing our emotions with strict discipline is one of the most difficult elements of any type of short term trading.
We all naturally want to hit a homerun rather than a single but success only comes to those traders willing to forego the homerun and become consistent at base hitting.
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One way to overcome the swing for the fences mentality is to utilize position sizing.
For example, if a trader were to enter a trade having purchased ten mini Dow contracts he can scale out of the contracts as the market moves in the direction anticipated.
He could sell half or five of the contracts once the position reaches profitability and hold the other five to let profits run if the market allows.
In this way emotionally undisciplined traders can make a profit and still satisfy there desire to swing for the fences.
Although it is not recommended for inexperienced participants to utilize this trading method, experience has shown new traders have great difficulty in selling a position when their emotions tell them they could gain more profit if they leave the position open.
However, by selling a portion of the position once profitability has been attained, the trader will at least lock in some profit and still satisfy the need to follow his emotions until such time he gains trading maturity.