1 Contract Trading Drill

There are so many dials that need adjusting to make trading slot into place.

• A good entry
• A sensible stop
• Decent target, not too greedy but not snatching at profits either
• Position size just right to maximise the gains yet minimise loss impact

The list is endless… (Well not endless, but it seems like it sometimes!) If just one of those variables is off, that can throw a decent strategy down the drain. You get a great entry, the right thesis, and then ping… stop too tight. Or you have a great run, nice trades, good upswing in P&L, and then ‘poof’, you give a chunk back on a badly sized trade.

I could go on, we’ve all been there and don’t need reminding…

Often the best leaps forward come when you isolate just one variable and work on that until it clicks.

Like a safecracker. One digit at a time…

With that in mind, how can we strip out some of the variables in trading and focus on one important thing?

Enter the 1 contract trading drill (1 contract, 1 lot, 1 clip, £1pp, just one unit). The idea behind using just 1 contract is that you are taking away any opportunity to scale in, scale out or second-guess yourself.

• You’re in and then out.
• You need to decide before each trade whether or not you are holding this for a trailer or just to a level.
• You need to be 100% sure that your entry is the best it can be. No room to add or scale in.

You strip away a lot of the extra decisions, bringing all your attention back to pure price action. To take it one step further you can strip away even more decisions. Leaving only the most important.

For example: Align only with the daily chart, using a fixed ATR stop and a fixed RvR.

What could that look like? If the daily is in an uptrend you only look for longs intraday.

• The stop is 25% of the 10-day ATR
• The target is 50%.
• 1 Contact

All you need to do is find a good place to buy intraday. That’s it. No other variables to consider, except “Is this a good place to buy for a swing higher?”

It’s actually quite liberating and refreshing when that’s the only job you have to do… Some of the pressure gets lifted and it unlocks a different perspective on price.

If you feel like nothing is falling into place and you’re constantly working on different aspects of your trading, it might be worth going back to basics. Build from there and you’ll build back stronger.