«How many pieces are in your pie?»
Traders,
Asset allocation is next on our list of money management topics. In traditional investing, asset allocation refers to how much of your overall portfolio goes into different assets such as stocks, bonds, real estate, and commodities. Usually, the portion you deploy in each comes down to your risk tolerance and investment objectives.
For instance, a more aggressive trader seeking a higher rate of return would allocate more to stocks and less to bonds and vice versa.
You can also apply the principle to your trading account but instead of spreading your capital among various assets, you’re spreading it across different systems. For instance, you may divide your account between cash flow strategies like covered calls, naked puts, condors, and directional systems like debit spreads. That provides strategy diversification and hopefully reduces the volatility of your account value fluctuations.
With time and experience, you’ll massage the exact amount of your allocation to each system. Do a little less of what doesn’t work and a little more of what does, and pretty soon, you’ll have a portfolio full of profitable systems you’re following with confidence.
Video Of The Day: Gino’s Gems – Finding the Unusual High Option Activity to Follow the Big Money
In today’s Gino’s Gems, Coach Gino Poore explains How to find the Unusual High Option Activity to Follow the Big Money.
Chart of the Day: S&P 500 ($SPY)
Stocks are pausing at resistance, but so far, bears lack teeth. You must love the lower volatility settling on stocks over the past two days. We deserve the break.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coaches Tyler Craig and Gino Poore talked about Money Management or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trade Masters 7:00 PM EST
Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.
Hard 14 MasterMind Group 8:30 PM EST
Owners of our premium system Hard 14 are invited to attend. System architect, Mark Justice, will be showing how to apply the principles taught in the course and more: (1) Watch & Learn as Coach Mark illustrates and points out large moving average pockets and potential origination points for the coming month; (2) Get updates on key moving average support and resistance points for the coming month; (3) Real-life examples of moving average signals from the previous weeks and patterns that are set up for the coming weeks; and (4) Extensive Q&A at the end of each session.
Trading Justice 487: The Wall of Worry Update
Welcome to episode #487 of the Trading Justice podcast where Coaches Mark & Matt Justice break down the wall of worry and give an update to the podcast from March (#466) where they laid out the original Wall of Worry which are macro events the market is focused on.
- Fed normalizing IR
- Inflation
- Stagflation
- Supply chain crisis
- Russia / Ukraine
Sit back and enjoy the macro conversation from Mark & Matt including a discussion on whether China is now in the Wall of Worry.
Financial freedom is a journey
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