When was the last time you ran out of buying power?
By Dave Mabe
That's a question I asked a trader I'm coaching on our last call.
And his response was: rarely.
Running out of buying power is a good thing.
If you're efficiently using your capital, then you should be hitting the limit pretty regularly.
If you're not, then your top priority should be figuring out what would give you the confidence to scale your trading so you do run out of buying power routinely.
That could mean:
Gaining confidence in a strategy you're already trading
Developing new strategies to use your available BP
If neither of those is feasible in the short term, then you should consider creating another account with the excess funds for diversification/risk management purposes.
Most traders think about the risk of specific trades, but the real unit of risk is your account.
When's the last time YOU ran out of buying power?
-Dave
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