This forum is for students of the ROCK trading strategy to share information.

Small Capital Accounts

1 reply, 2 voices Last updated by John Locke 3 years, 2 months ago
Viewing 1 reply thread
  • Author
    Posts
    • #12704

      John Locke
      Keymaster
      @john-locke
      Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

      Jon,

       

      In the Rock and other videos you cover how to trade with small capital such as $5,000 but for example with the M3 the trade off is giving up the calls and more upside risk. I would like your opinion if your were starting over from scratch and you had 3 accounts a 5k, 10k and 15k. Would you only do the SSS Bull and the SSS Bear when appropriate and wait until you had the recommended 50k/100k to do the M3/Bearish Butterfly or the Rock? Or would you do the 5k Versions taught in the Rock for M3, Bearish Butterfly (Non-SSS) and Rock?

      In the 5k Account which strategies would you do personally?

      In the 10k Account which strategies would you do personally?

      In the 15k Account which strategies would you do personally?

      This is assuming that you have other funds in 401k and etc and not exceeding the 20% of network and assuming someone had access your training courses covering this.

       

      The challenge that most people have with trading in general is that they tend to think very short term, IE what can I do most easily now, how can I make the most money now? ………. RATHER than thinking long term IE what do I want my life to look like in 10 years and what are the best things for me to do now to reach that desired outcome?   These are 2 very different questions that will result in very different answers. In addition, because we likely have different goals and different personalities, something appropriate for me may be problematic for you and vice versa.

      For example, I had $5000 to my name when I started. I risked all of it creating M9/BB/M21 style trades on the fly and going for very high returns. Was it risky? Yes, but from my point of view, I wanted to learn to confidently trade as quickly as possible. The strategies I was learning made 50% per year at best if they worked AND they weren’t working. And even if they worked, making 50% per year on 5K, I might as well mop floors at McDonalds…. So I decided to do something different, I figured if I lost it all, then I’d go back to work, save up $5K and try again. Would I have done it differently? No. Is this approach good for everyone? No.

      So what would “I” do? Learn M21 or Ultimate income Trader, take 5K and risk losing it all trading it as aggressively as possible.

      But I’m not you.

      You’ll find that the only way to appropriately answer the question for you is to first consider your situation and decide where you want to go and then trade in a way that’ll teach you how to get there.

       

      I’m going to throw out a very general answer to the above question.

      “IF” your ultimate goal is simplicity, especially if you’re willing to learn how to effectively add market timing into your trading, and you’re willing to accept the well defined losing scenario and your income goals are moderate 20-60% per year, then a timed bull/bear strategy would be a simple, great trading style you can use pretty much indefinitely.

       

      If your ultimate goal is more geared toward taking absolutely no market opinion, you cannot get yourself to accept losses, and/or you find yourself wanting to fight it to the end (realize you will have losses anyway but at least you get the “feeling” they’re more controlled) then you’re best off diving into the small sized M3 as soon as possible, even if the trade may not do as well with the IWM mix. You’ll learn a ton about that style of trading without taking too much risk and be a much better trader later on when you get to the higher capital levels.

      Look at the reduced performance as tuition.

      I would not recommend simply jumping into a huge M3 just because you were trading a Bull and Bear trade well.

      If your ultimate goal is to be a very aggressive “income” trader, then I would focus on learning how to read the market as I did (M21/UIT) and focus on how the various positions react over time to price and IV movement, and then start making trade plans specific to situations that takes those opinions into consideration using small positions and then scaling up as you become proficient at it.

       

      To get more specific than that would take a very specifically framed question and/or a comprehensive analysis of your situation and psychology.

       

      How do you decide when it its time to trade which strategy to do ex: M3, Bearish Butterfly, Rock? If using these do you use 30 DTE? If not what DTE?

       

      This is a VERY, VERY generalized question.

      You could simply follow the program rules. They work extremely well over time…. OR

      If you’re going to get subjective, it depends completely on the specific situation which goes back to learning how to get a feel for the market and completely understanding how the various positions react.

       

      I know it may not be the exact answers you’re looking for but it’s the way it works. Think long term the way that you want to trade far in the future. Decide if you want to be non subjective, in which case follow the rules. OR decide to be subjective, dive in and start learning.

    • #12686

      Jonathan Brown
      Participant
      @jonbrownmasterit@gmail.com
      Points: 48
      Rank: Newbie

      John,

      In the Rock and other videos you cover how to trade with small capital such as $5,000 but for example with the M3 the trade off is giving up the calls and more upside risk. I would like your opinion if your were starting over from scratch and you had 3 accounts a 5k, 10k and 15k. Would you only do the SSS Bull and the SSS Bear when appropriate and wait until you had the recommended 50k/100k to do the M3/Bearish Butterfly or the Rock? Or would you do the 5k Versions taught in the Rock for M3, Bearish Butterfly (Non-SSS) and Rock?

      In the 5k Account which strategies would you do personally?

      In the 10k Account which strategies would you do personally?

      In the 15k Account which strategies would you do personally?

      This is assuming that you have other funds in 401k and etc and not exceeding the 20% of network and assuming someone had access your training courses covering this.

      How do you decide when it its time to trade which strategy to do ex: M3, Bearish Butterfly, Rock? If using these do you use 30 DTE? If not what DTE?

Viewing 1 reply thread
  • You must be logged in to reply to this topic.