trading

Ruckard Smith Trading notes

Disclaimer - TOP

Please read the disclaimer notice.

Introduction

These are my trading notes and open source contributions to trading, cryptocurrencies and alike.

Bank accounts management for trading

If you want to live by only trading you need an initial amount of money that serves as a money mattress.

In the ¿Se puede VIVIR DEL TRADING sin INVERSIÓN INICIAL? - Vivir del trading de FOREX Zartex video it is advised:

• Income Bank Account.
  • Bank Account.
  • Incomes for this bank account come from your job, from the trading account, et caetera.
  • It needs to have, at least, the equivalent of 12 months of expenses.
  • I.e. You seem to be able to live with 1,000 US dollars per month.
  • That means you need about 13,000 US dollars in this account.
• Expenses Bank Account. -Bank Account.
  • It needs to have, at least, the equivalent of 3 months of expenses.
  • I.e. You seem to be able to live with 1,000 US dollars per month.
  • That means you need about 3,500 US dollars in this account.
  • You use to pay on your everyday life.
  • Advantage: Having 3,500 US dollars for your everyday life is very important. If you only had, maybe 100 US dollars, you might be anxious while operating and that's not good for trading.
• Trading Bank Account.
  • Bank Account.
  • It needs to have 90% of your trading allocated money.
  • Assumption: Our trading allocated money is: 10,000 US dollars
  • This account would have 9,000 US dollars.
  • Advantage: If your broker trading platform/exchange goes bankrupt you still have your 90% trading allocated money safe.
• Trading Broker Account.
  • This is not a bank account but an account in your broker exchange or platform.
  • It needs to have 10% of your trading allocated money.
  • Assumption: Our trading allocated money is: 10,000 US dollars
  • This account would have 1,000 US dollars.

How does the flow of money works?

Each month you begin on your Trading Broker Account with 1,000 US dollars. However you manage your risk with your total 10,000 US dollars in mind. I.e. each entry is 1% of 10,000 US dollars (not 1% of 1,000 US dollars).

It's expected that at the end of each month you to win an extra 1,000 US dollars. If you win those extra 1,000 US dollars should be retired to the Trading Bank Account. So the next month you start again with 1,000 US dollars.

It's expected that at the end of each month you to win an extra 1,000 US dollars. If you don't win those extra 1,000 US dollars then you need to refill your Trading Broker Account with your Trading Bank Account. I.e. If you end the month with 750 US dollars you transfer 250 US dollars from your Trading Bank Account to your Trading Broker Account. So the next month you start again with 1,000 US dollars.

This way of working tries to avoid you having to recover those 1,000 US dollars.

Each 3 months you might win 3,000 US dollars (Per above you should already have them on your Trading Bank Account). So those 3,000 US dollars are transferred from your Trading Bank Account to your Income Bank Account.

Each month you transfer 1,000 US dollars from your Income Bank Account to your Expenses Bank Account. As if it was your salary.

Bank Account management examples

1,000 US dollars salary.

* Income Bank Account: 12,000 US dollars
* Expenses Bank Account: 3,000 US dollars
* Trading Bank Account: 9,000 US dollars
* Trading Broker Account: 1,000 US dollars.

1,500 US dollars salary.

* Income Bank Account: 18,000 US dollars
* Expenses Bank Account: 4,500 US dollars
* Trading Bank Account: 13,500 US dollars
* Trading Broker Account: 1,500 US dollars.

2,000 US dollars salary.

* Income Bank Account: 24,000 US dollars
* Expenses Bank Account: 6,000 US dollars
* Trading Bank Account: 18,000 US dollars
* Trading Broker Account: 2,000 US dollars.

This video assumes that we can earn 1,000 dollars out of 1,000 dollars each month by having a 10% return of 10,000 US dollars per month. I have no idea if that's feasible or not. So you might want to redo your calculus with a different monthly return.

Note: I don't like this Zartex guy because he promotes his channel with a lot of ads in Youtube. However this specific video that he made made sense to me.

Trading approaches

My different approaches to trading

TradingView indicators and strategies

TradingView indicators and strategies page

Disclaimer - BOTTOM

Please read the disclaimer notice.