Momentum / day trading account split

Just a little blathering on about playing with numbers regarding trade sizing again.

Seeing as I was playing with profits only for the momentum trading and most of those tanked due to poor entry timing, I am having to consider how to size those trades... which I have talked about before. Now it is not so much how to size the new trades but how to split the account into three partitions for each of the three methods of trading. Trade sizing using the equal value model is the way to go... that part is the easy part.

Having said that, my gut says to drop momentum altogether and just go with daytrading for the next while THEN get back into the momentum stuff. I don't always listen to my gut though.

So I figure that I will count the stock trades as liquid capital, to be used if needed as it is only about $1,500 in cash due to the way stocks get assigned margin based on the buying power in the account. I have decided that I will set aside 20% of the base capital to hold as cash anyway so these get lumped into this float amount.

Then I will split the balance into two unequal parts weighted heavily towards daytrading. If I go with 10 possible concurrent trades in daytrading and the same for momentum trading and I use a 60+/40- split that allows all daytrades to be a minimum of $1,000 I should be OK.

I may go as high as 75% but that puts my momentum trades into such a small scale that I may be best to just leave them alone until the capital base is larger. Perhaps when reasoning confirms my gut I should go with that and assign 100% of the trading capital to the daytrading and be done with it.

That makes my trades in the $1,500 range and we are not likely to get to 10 concurrent trades as the room is aiming for 3-5 per day... the odd one gets held over depending upon the market conditions at the time.

I may see how many trades are expected in the momentum trading, if I figure on 6 or 7 and lower the daytrading to the sort of 7 max the numbers look a little more favourable to continue with both trading plans. This gives me a 65/35 split which puts daytrades into the $1,400 size and momentum trades into the $750 area. That would be acceptable and, given the track record of both services I feel comfortable with those numbers.

Now it's time to wait for Monday's trading.

Jeff.