In the last few weeks trading, I’ve really been focusing on my strategy, which I’m getting more confident with (check out all my trades as they come in on my trade2win journey thread).
However, one thing that was geeking me out a bit was always having a vastly different position size for every trade. Some trades had $2k position size while others had $400 – which made keeping a consistent P/L very tricky. This is because my new portfolio was spread across several accounts across several brokers. Mainly with the goal to see what worked and to avoid the PDT rule as much as possible.
When I started the $25k account size challenge I was not allocating my position sizes properly for an ideal position size to a max number of trades ratio I could be doing within the PDT rule.
At first, I thought I should open several brokers or an offshore broker to allow me to trade more which is definitely an option but I want to focus more on the strategy than just plopping out a large number of trades. Not to mention the issues one runs into when switching brokers during live trading hours. It’s just confusing.
Check out this video here I entered $CLVS and didn’t even know it!
Therefore I decided to look back at what I already had. So what my new game plan was and it’s what I first mentioned or hinted at in part 3 (The Plan) of the $25k challenge is to use my TD broker which has 2 accounts. 1 cash account and 1 margin account.
The margin account gives me 3 trades per 5 business days while the cash account I’ll over-allocate for now so I can trade it 6 times per week.
Example:
$4.5k Account Size
- $3k inside Cash Account (2 Day cash settling period)
- $1.5k inside Margin Account (Max 3 trades per 5 business days)
- That would give me the ability to roughly trade 9 x $1.5k position sizes per week.
Now to keep growing my account until I’m past the PDT rule, I’ll be looking to rebalance the accounts. So I can always maintain the ratio above. I’ll be doing that at the end of the week so come Monday we’re ready for action again with the ability to take maximum position sizes.
This is really my strategy for my current $25k challenge goals. This won’t fit everyone’s trading style or goals. One thing I hope you take away from this video is to take the time to think about what makes the most sense for you.
What system can you setup that will help you reach your goals the quickest?
This is the google sheet that helped me figure out my ideal allocation
All of my other trading analytics I do is on my trade journal here: https://www.tradejournal.co/winkler/