The portfolio seeks to generate $96K in income annually on $200K of actively managed assets. There will be up 10 trades open MAX and the total portfolio capital utilized cannot exceed 70-85%. Said differently, there will always be a minimum of 15-30% cash on hand.
The monthly income target will be $8,000. Each week, ideally, we should be managing 6 active trades with a max of 3 new trades deployed if sentiment is very bullish and 0 new trades if sentiment is very bearish for the week.
Each trade should have a max capital value of $23,500 or less ($200K x 70% Cap Utilized / 6 Trades = $23,333) with a max loss of $750-$1,000 and an average upside of $1,500 per trade. The goal is to deploy 3 trades on average per week and score two wins which will total $2,000 ($1.5K Win + $1.5K Win – $1K Loss = $2K).
The Portfolio Management Approach MUST be one that locks in $2,000 worth of gains EACH week and has 3 trades open for the following week. So 6 trades open the beginning of the week and by the end of that week 3 trades will be closed for a total of $2,000 in gains ($1.5K Win + $1.5K Win – $1K Loss = $2K) for that week or a total of $8,000 for that month.
Day Trading Rules:
- Close out your trades each day
- focus on the tule of 3 meaning a trend is established with 3 candlesticks regardless of timeframe. If you have a BIG reversal candle get out and wait for the next two candle sticks to confirm which direction to go next. Also big candles that change direction – a 50-75 cent move on a 5 minute chart for SPY – usually indicate a reversal in trend. Don’t chase an uphalt after it’s started.
We’re looking for setups with a 3:1 or 2:1 reward ratio
If a you get a 50 cent to 80 cent move in less than 15 mins take during mid day take profits