≈ Portfolio Design Continues ≈
Traders,
It is importance to determining how many trades you are going to enter and manage. Some traders are most comfortable with about 5-6 trades on, others can manage 25-30. How many trades do you want to be in at one time? If you can determine your optimal portfolio before you start clicking buttons, it will be a lot easier to build that portfolio.
We enter trades one at a time. Like buying produce at the grocery store, we move step by step and pick up what we need. Carrots, onions, lettuce, tomatoes, avocado…. we add them one at a time and all the sudden we have a full grocery cart.
In trading, adding one trade at a time, without a well-defined trading plan, can end up with a mess of a portfolio, too many positions, and an overly complex design.
Think of your account like you are going grocery shopping. If you know what you are cooking, and have a list of items that you go to the store prepared for, it’s much more likely you’ll be efficient, not waste and come back with what you need.
In your trading account, you should have a list of trading systems that you are willing to trade. Those systems should have pre-defined limits to how many trades you will take as well as how much capital you will spend per trade.
This step is crucial in portfolio design, and it is hard to know how many trades you can manage efficiently until you start paper trading, journaling and executing those trading plans.
Here is a challenge for today: Use the Chart of the Day below to list out the following.
- List how much capital you have in the account you are thinking about
- List how much capital you will allocate for cash flow, growth, and speculation
- Define which systems you will trade (i.e. Boomerang, Cash Flow Condors, Tackle 25, STEP System, etc.)
- Determine how many trades per system that you are willing to trade at one time (as a maximum)
- Tally up the total number of trades across all systems
Having a blueprint for your portfolio is extremely helpful, for any trader at any level. Your portfolio design will change over time, as you gain experience, learn new strategies and as market conditions change. But, if you have never done an exercise like this, it may be an eye opener as to what you need to start working on for your own personal rules.
#TeamTackle
Chart of the Day
Portfolio Design – Systems – Positions
In this example, you see a portfolio design exercise that you can do one step at a time to help you build a basic portfolio blueprint. Building your rules for your trading portfolio is an important and ongoing step for any trader, at any level.
Video of the day
Special Webinar – Killer Swing Trading Set Ups
If you missed last night’s webinar with Coach Mark, Tyler and Noah, watch the replay here! The Coaches have a great discussion on Swing Trading, how to find candidates, select their trades and more in this valuable class.
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.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
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.
Financial freedom is a journey
The Tackle Today series is brought to you by Tackle Trading.
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
# Sign up now for a 15-DAY FREE TRIAL #
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
