hi B1S2 You cant be earning that much on your cash/mutual funds for 80% of your investments. If you are doing so well with your trading account which average 50-80%, why would you ever want to be in cash or mutual funds for 80% of your total investments? It sure wont be much more time consuming to put a larger trade on or is a bigger postition worrying you? Is your trading account too risky to be there 100%? Could you tell me what your average leverage is on your trading account? thanks
Well, the reason that I keep money in mutuals, is to be diversified. If I had it all in the trading account, even I might be tempted to use more margin than I need to. The leverage that I use on the trading account is 5 to1. This equates then to 1 to 1 over the whole portfolio. If I am 5 to 1 on ES or NQ of course, then I need to watch how much I have in mutuals so that I am really not overleveraged since this would be a duplicate.
hi B1S2 thank you for your frank reply. at the moment I am not a day trader, but trading short/medium term. I would like to invest part of my portfolio in longer time frames of at least 1 year as this is more tax effective. Here in Oz if I hold over 1 year, half of those profits will be added to my income. Less than 1 year, full profits added to income. I understand that your trading positions play out generally over more than 1 year. Do you enter when the trading vehicle is at year high or do you have a shorter time frame? thanks for your info
Yes, I agree. You will generally see scaling done by folks who have too large a position on to leave their screen(ie too large for their account).
JJ, Osorico and Steve46, My belief about position/swing versus daytrader is geared towards the fact that newbies and uninitiated traders need to be doing longer term trading first and then once they have had a lot of success, they may wish to turn to daytrading. My argument is not that you can't make money daytrading, rather it is that most people cannot, so why go there first?
I was surprised to see how many "successful" traders tells newbs to learn how to day trade 1st. Their argument is not having the overnight exposure..but I find that to hardly be a problem.
All three, the weighting depends on market conditions. The balance changes constantly but to be honest I've made most of my money over the years through position trading. Over the last 14 months I've been unwinding very long positions to reduce my exposure. To date: buy and hold 3% position 39% swing 22% day 7% cash 29% I rarely use leverage. Cash is always around 30% for those once in a lifetime opportunities that surface once or twice a year.