I am interested to know how full time traders split their total wealth between various accounts. There was some discussion in another thread but I think it deserves its own.
For example do you keep it in all in the trading account or have separate accounts for long term investments and/or cash if it all goes wrong in the trading account. To try and protect you from yourself rather than having everything in one account. The suggestion was to have only a small portion in the most active account and force yourself to have a major reappraisal if you ever need to transfer more money into it.
For me, I currently have a full time job and so trying to grow the total as quickly as possible. The bulk is in a trading account. However, if and when I switch from growing quickly to decreasing risk, maintaining wealth and withdrawing from the account a different setup is probably needed.
With say 1,000,000 splitting it up as:
200,000 in trading account. Several trades per week. Normally swing/ position trades. Variable leverage but can be high via options.
400,000 in longer term investments ETFs etc. A few trades per year. Limited leverage.
400,000 in buy and hold investments with income. No leverage.
With these accounts conservative annual targets would be 20%, 10% and 5% respectively so they produce 40,000 + 40,000 +20,000 = 100,000 per year or 10% of total. Any better ideas?
