Tackle Today: The 80/20 rule of strategy selection | Tackle Trading

Bread and Butter and Bag of Tricks


One of the most popular posts we have ever published at Tackle Trading was the Start with Why post from 2015. If you’ve never read it, check it out here: https://tackletrading.com/tackle-trading-101-start-with-why/

Part of the intent of the post is to drive students into a conversation about portfolio design and specifically the 80/20 rule where you use your ‘Bread and Butter’ strategies 80% of the time and your ‘Bag of Tricks’ strategies 20% of the time.

Remember, There are many different strategies in the market, and many in our Tackle Trading Playbook: https://tackletrading.com/store/tackle-trading-playbook/

Some traders are willing to trade many different strategies. Whether you label a strategy to be ‘Bread and Butter’ or ‘Bag of Tricks’ strategy is a personal designation and can change from trader to trader and account to account.

What are your Bread and Butter Strategies? What are the techniques that you understand the best, know that you can execute your rules within and that you have an edge in? Have you listed them out?

Which are your Bag of Tricks Strategies? What are the techniques that you will trade occasionally?

Review your playbook, and then try this exercise: Make 3 lists and write down where each strategy in the playbook fits into your current trading skill set and plan.

1. Bread and Butter

2. Bag of Tricks

3. Other (those strategies you don’t use or trade right now)

Going through this simple exercise will help you organize your strategies and clarify what you do and how often you should be doing it. This will lead to further examination of your overall trading plan.


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The 80/20 Rule

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Trading for beginners: Start with Why

Review the video where the 80/20 rule is explained, from Coach Tim.

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Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

Originally published at https://tackletrading.com on August 14, 2020.




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