Money Management
I place a limit order for stocks I am looking to trade based on charting. The buy limit is the 10EMA.
Amount I spend on each trade.
I look at my available cash. If my available cash is over $1000 then I divide it by 10% and that is what I spend on my top prospect for the day. Lower the RSI the stronger the prospect. Next stock for the day is the same except I subtract the first prospect, and this continues.
Example of this concept. Available cash in the account for the day is $5000. Stock 1 is 10% of that so I invest $500 into it. Stock 2 has available cash of $4500 for the day so 10% is $450 for that one. Stock 3 has $4050 available cash so $405 for that one. Stock 4 has $3645 so 10% is 364 and so on. Note usually after my scan of the daily stocks I only find 2 or 3 to trade in for that day.
If available cash is under $1000 then each trade gets $100 till there is no available cash left the rest of the trades for that day do not get traded.
I feel for best results I need to keep the money flowing in the account. Trades are only active for 10 days at which point I close it if it did not hit the target to make funds available.
Once in a trade the target is 3X the limit order. So, if the limit is .0006, then the target is inputted the night of the trade for .0018.
Also, when the accounts available cash is under $1000 at the start of the month I add $100 to the pool each month for more trading action.
Cashing out. Stocks that hit targets the profit is split 50/50. 50% is left in the account, 50% is moved to my personal finances where 30% of that 50% is set aside for taxes. Example – Let’s say the profit for a trade is $400 dollars. $200 gets transferred to my personal checking account. From there $60 is put into savings for a tax hold and $140 is personal use.
