Live My Life Online

It is always important to start with clear objectives before you put your money into the stock market. I frequently think that people who have about $100,000 of trading or investment capital, but if you need about $50,000 to live on each year, you are putting yourself in a very difficult position. You might believe you can make 100 percent every year, and perhaps you can. But if you start out with a 30 percent draw down(which is quite possible) your situation becomes very tenuous at best.

That’s why it’s best to answer these self assessment questions before you develop your investment objectives.

1. How much capital do you have?
2. How much money do you need to live on each year?
3. How much of that must come out of your trading profits? This is important to ascertain your risk profile

   

4. How much time during the day do you have to devote to trading?This is important because the amount of time you have available almost dictates the kind of trading system you must develop. Those who have a full-time job and just look at the markets in the evening must, quite obviously, find a fairly long term system to use.
5. When you are trading, how many distractions can you expect to have? If you intend to have many distractions, then you need a trading methodology that allows you to deal with those distractions.
6. How much time do you expect to devote to developing your trading system, to doing your personal psychological work and to working on your business plan for trading? Obviously, there is no easy ways to achieve financial freedom
7. What are your computer skills? What skills did you need before you began this trading venture? In stock market arena, speed is the king
8. What do you know about statistics? Trading is all about fundamental and technical analysis or Statistics.
9. How would you rate your market knowledge? Here you should include what you know about trading mechanics, what moves the markets, how to execute orders effectively at low cost, which trading indicators you might need, etc.
10. What are your psychological strengths and weaknesses, especially in terms of trading system development? The number 1 psycho to our trading decision is external influences.
11. How about your strengths and weaknesses in terms of personal discipline? You must be very discipline when come to trading.
12. Based upon your personal inventory, what did you need to learn, accomplish, or solve prior to beginning trading? This is basically a feedback loop, to continuous improvement initiative.

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