Profit Cycle Money and Position Size Management System for Option Traders

Disclaimer: This is just a recommendation to show how a money management system should look. You can feel 
free to use this  as-is or change according to your account size and trading style. Following this system doesn’t 
guarantee any profits as it depends on a lot of other factors. However, it is recommended that some kind of 
trading system is required to stay disciplined.

Profit Cycle Money Management System (Trading System)

Click on the image to enlarge. 

SleekOptions.com  Member Name: __________________________________

Below is the template to create your own Profit Cycle Money Management 
System Rules based on the framework. Add additional rules if required. 
Take a copy of this to create your own settings for each rule.

1. What % of the capital are you going to invest in each trade from capital account?
Recommended: 3% TO 5%

2. How many Focus symbols are you going to focus on for your 
Capital Account Trades?
Recommended: 3-5 for account above 10k, 1 or 2 for account lesser than 10k

3. Are you going to keep changing your focus symbols for each ProfitCycle?



4. Are you going to trade in two lots or just one lot? Two lots are 
Starter Lot (1st Lot) and Accumulation Lot ( 2nd lot). Accumulation Lot is also 
called Adjustment Lot.
Recommended: 2 lots for trades from capital account

5. What is your investment ratio between 1st and 2nd lot trades?

Recommended:  1:3 or 2:6

6. What is your exit criteria for trades placed from capital account?

Recommended: Exit at 30% profit

 

7. How much % of the profits from capital account are you going to keep 
moving to profit account?

Recommended:  80%

8. How many active open positions from capital account at any given time?

Recommended: 2 to 3

Note: Starter Lot + 2nd Lot is considered one single position even though they are two different trades.

 

9. What are your rules for 2nd lot entry?

Recommended: Come up with a rule and apply the same rule consistently.

10. When will you start placing trades from Profit Account? 
What is your balance threshold?

Recommended: Don’t place any trades from profit account either until the balance in the profit account 
is accumulated to $500 or the balance is more than 5% of the balance of the capital account.

 

12. Are you going to place trades from profit account when you have active 
open positions in capital account or wait until all the positions in the capital 
account are closed.

Recommended: Wait.

13. How many consecutive trades are you going to place from profit account?

Recommended: 2. After 2 consecutive trades from profit account, move the entire balance 
back to capital account. This completes your profit cycle and you can start 
the next profit cycle.

14. After each trade from profit account, how much % of the proceeds 
are you going to invest in the subsequent trades in profit account? 
Is it 100% or 80%?

Recommended: After each trade from profit account invest 80% of the 
profit account balance in the next trade and move 20% back to capital account.

 

15. Are you going to have different set of focus symbols for profit account 
trades or going to use the same focus symbols you used for capital 
account trades?

Recommended: No

16. What is your exit criteria for trades placed from profit account?

Recommended: Hold until the current trend is broken.

For position sizing, you can use one of the suggested methods or 
you can create your own method.  But, apply the same rules consistently.


Click on the image to enlarge.

My Profit Cycle Logs:

Profit Cycle 1

Metrics Summary
Profit Cycle Started On:
Focus Symbols:
Initial Capital:
Profit Cycle Completed On:
No of trades from Capital Account:
No of trades from Profit Account:
No of winning trades (1st Lot)
No of winning trades (2nd Lot)
Avg Win%
Avg Loss%
Net Profit/Loss for this profit Cycle:

Log of trades placed from Capital Account

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

Log of trades placed from Profit Account

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

_________________________________________________________________________________

Profit Cycle 2

Metrics Summary
Profit Cycle Started On:
Focus Symbols:
Initial Capital:
Profit Cycle Completed On:
No of trades from Capital Account:
No of trades from Profit Account:
No of winning trades (1st Lot)
No of winning trades (2nd Lot)
Avg Win%
Avg Loss%
Net Profit/Loss for this profit Cycle:

Log of trades placed from Capital Account

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

Log of trades placed from profit account.

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

___________________________________________________________________________

Profit Cycle 3

Metrics Summary
Profit Cycle Started On:
Focus Symbols:
Initial Capital:
Profit Cycle Completed On:
No of trades from Capital Account:
No of trades from Profit Account:
No of winning trades (1st Lot)
No of winning trades (2nd Lot)
Avg Win%
Avg Loss%
Net Profit/Loss for this profit Cycle:

Log of trades placed from Capital Account

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

Log of trades placed from profit account.

Entry Date	Starter Lot/2nd Lot	Trade Details	Exit Date	Net P/L

____________________________________________________________________________