🚀 Phase 2: Capital Deployment Plan¶
Goal: Deploy $10k-$20k over next 2 weeks Method: Test strategies in paper, deploy winners to live Target: 3-5 new positions, maintain 60%+ win rate
📋 Strategy Selection (Based on Your Winners)¶
Strategy 1: Momentum Breakout ⭐ PRIMARY¶
What it does: Buys stocks in strong uptrends with momentum Why it works: This is how you caught NVDA (+55%)
Criteria: - Price > 200-day SMA (long-term uptrend) - RSI > 60 (strong momentum) - Price > 20-day SMA (short-term uptrend) - Recent 7-day gain > 5% - ATR% < 5% (not too volatile)
Exits: - 3x ATR stop loss (adaptive to volatility) - 3x ATR profit target - Or trailing 9% stop
Best for: Trending stocks in bull markets
Strategy 2: RSI Mean Reversion (Backup)¶
What it does: Buys oversold stocks expecting bounce
Criteria: - RSI < 30 (oversold) - Price < 20-day SMA (dipped) - Recent 7-day drop > 10%
Exits: - 3x ATR stop loss - Quick 5-10% profit target
Best for: Quality stocks that dipped temporarily
Strategy 3: RSI Extremes (Opportunistic)¶
What it does: Catches extreme moves
Criteria: - RSI < 20 (extremely oversold - rare!)
Exits: - Same as mean reversion
Best for: Panic selling opportunities
🎯 Deployment Workflow¶
Week 1 (Oct 14-20): Paper Trading¶
Day 1 (Today): Screen & Deploy to Paper 1. Run momentum scanner on 10-15 candidate stocks 2. Find 3-5 stocks meeting ALL criteria 3. Deploy to Alpaca Paper ($500-$1000 positions) 4. Set ATR-based stops automatically
Candidate Stocks to Screen: - Tech: AAPL, MSFT, AMD, GOOGL, META - Growth: TSLA, SQ, SHOP, COIN - Leveraged ETFs: TQQQ, SOXL, UPRO (if momentum strong) - Sectors: Check strongest sector, screen top stocks
Day 2-3: Monitor Paper Trades - Check positions twice daily (open, close) - Watch for stops triggering - Note which setups work vs don't
Week 2 (Oct 21-27): Live Deployment¶
Criteria to Go Live: - ✅ Paper trade showed profit (or small loss) - ✅ Strategy logic played out as expected - ✅ No major issues with execution - ✅ Market conditions still favorable
Live Deployment: 1. Select 2-3 best paper performers 2. Deploy $500-$1000 each to Alpaca Live or Schwab 3. Use same stops as paper (3x ATR) 4. Add 9% trailing stop once up 15%
Position Sizing: - Start: $500-$1000 per position - Max per stock: $2000 - Total deployed Week 1: $3k-$5k - Total deployed Week 2: $10k-$15k (if winners)
📊 Success Metrics¶
Week 1 Targets:¶
- [ ] 3-5 paper positions deployed
- [ ] At least 2 positions profitable
- [ ] Win rate > 50% on paper
- [ ] No single loss > 5%
Week 2 Targets:¶
- [ ] 2-3 live positions deployed
- [ ] $5k-$10k capital deployed
- [ ] At least 1 winner up >10%
- [ ] No position down >5%
End of Phase 2 (2 weeks):¶
- [ ] $10k-$20k total deployed
- [ ] 5-8 total positions
- [ ] Win rate > 60%
- [ ] Portfolio up 5-10% overall
🛠️ Tools & Execution¶
Today's Action Plan:¶
Step 1: Screen for Momentum Candidates (30 min)
- Choose option "1" (Momentum Strategy)
- Screen 10-15 stocks
- Note which pass ALL criteria
Step 2: Deploy Top 3-5 to Paper (15 min) - For each passing stock, execute paper trade - $500-$1000 position size - Auto-sets ATR-based stops
Step 3: Document Trades (10 min) - Record entry price, stop, target - Note why it passed criteria - Store in memory system
📝 Candidate Stock List (To Screen Today)¶
High Priority (Most Likely to Pass):¶
- AAPL - Large cap, liquid, trending
- MSFT - Same, AI momentum
- NVDA - Your winner, check if still good
- AMD - Chip sector momentum
- META - AI/tech momentum
Medium Priority:¶
- GOOGL - Big tech
- TSLA - High volatility (might fail ATR filter)
- COIN - Crypto proxy
- SQ - Fintech
- SHOP - E-commerce
Leveraged (If Market Strong):¶
- TQQQ - 3x NASDAQ (use smaller size!)
- SOXL - 3x Semiconductors
- UPRO - 3x S&P 500
Sectors to Check:¶
- Run sector ETF scan: XLK (tech), XLF (finance), XLE (energy)
- Pick strongest sector
- Screen individual stocks in that sector
⚠️ Risk Management Rules¶
Per Position:¶
- Max size: $1000 (paper), $2000 (live after validation)
- Always use ATR-based stops (3x ATR)
- No position > 5% of account
Portfolio:¶
- Max deployed: 20% of total ($20k max)
- Keep 80% cash reserve
- Max 8 positions at once
- Max 2 positions same sector
Exit Rules:¶
- Stop hits: Exit immediately, no questions
- Down 5%: Review position, consider exit
- Up 15%: Add 9% trailing stop
- Target hit (3x ATR): Take profit or trail
🎯 Expected Outcomes¶
Conservative Scenario (50% win rate): - 5 positions @ $1000 each = $5000 deployed - 2 winners (+10% each) = +$200 - 2 losers (-5% each) = -$100 - 1 break-even - Net: +$100 (+2%)
Target Scenario (60% win rate): - 10 positions @ $1000 each = $10,000 deployed - 6 winners (+15% avg) = +$900 - 4 losers (-5% avg) = -$200 - Net: +$700 (+7%)
Best Case (70% win rate, like NVDA/LABU): - 10 positions @ $1000 each = $10,000 deployed - 7 winners (+20% avg) = +$1400 - 3 losers (-5% avg) = -$150 - Net: +$1250 (+12.5%)
📅 Timeline¶
Today (Oct 14): Screen stocks, deploy 3-5 to paper Oct 15-16: Monitor paper trades Oct 17: Review paper performance, deploy first live trade Oct 18-20: Monitor live, deploy 2nd-3rd trades Oct 21-27: Scale to $10k+ deployed Oct 28: Phase 2 review, plan Phase 3
✅ Ready to Start?¶
Next Command:
Then: 1. Choose "1" for Momentum Strategy 2. Test AAPL first 3. If it passes, execute in paper 4. Repeat for 4-5 more stocks 5. Come back and report results
Goal for today: 3-5 paper positions deployed with momentum strategy!