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