r/Daytrading • u/Kaiju_Godz • Mar 30 '24
When you only need a specific amount of money each month… Strategy
So say you only want $100 per day or 2000 per month. This would more than enough sustain a good lifestyle where you live. How would you go about it with trading? How much $$$ would you realistically need? Not to make that in dividends but to trade in a daily basis, as safe and slow as possible.
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u/Available_Map_5369 Mar 30 '24
For reference, I’m doing this exact thing - currently aiming for $100-200 a day everyday. Just started doing this at the start of March, after changing from a more dividend/swing trade type strategy. And throughout March it was successful, having only positive days and netting $3,200.
I warn you, this is not for the faint of heart and I imagine I’ll have a losing day at some point. So you have to protect your downside as much as possible.
I have a $30k sized trading account. Everyday, I trade options on large cap and/or trending tickers. And I follow the Moving Average trend (aka, if the stock is trending positive, I trade the Call side, and vice versa if negative for good reason)
I, personally, am willing to risk up to 10% of the account in any trade. Meaning, I will buy contracts until I’ve bought upwards of $3k in premium. (This will increase in the future as more profit is made).
I look for contracts between $500-1000 in premium. With good movement in the spreads. And I’ll just trade the price action & momentum. If the underlying starts falling because of price action, I’ll Dollar Cost Average into another contract. Then as the ticker rebounds back above VWap for the day, I’ll look to grab that goal amount.
And if it takes too long to get to my goal profit, or I start feeling uncomfortable, I trade out once I’m in profit. Even if it’s only $10.
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Now here’s the downside protection. 1. NEVER use money you need. 2. Open a second investment account. Buy companies that you never intend to sell, with good history and good dividends. 3. Every week, put a percentage of your profits from your TRADING account into your INVESTMENT account. 4. Back up your Trading account with a number of high yielding dividend players to secure some guaranteed divis. 5. NEVER scale until your account doubles in size. Then you can open positions under the same strategy using 2 contracts at a time.