11 Minute Read

Tackle Today: How many trades can you manage?

December 3, 2020

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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.

  1. List how much capital you have in the account you are thinking about
  2. List how much capital you will allocate for cash flow, growth, and speculation
  3. Define which systems you will trade (i.e. Boomerang, Cash Flow Condors, Tackle 25, STEP System, etc.)
  4. Determine how many trades per system that you are willing to trade at one time (as a maximum)
  5. 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.


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