It's my goal to be a consistently profitable, professional stock and FX trader by May 1, 2013
This has been my goal for a number of years, and I feel like I am at a place where in my head I am sick of thinking about this goal and not taking any serious action towards achieving it.
Hence this post.
In order to achieve my goal, I have done an analysis of my past efforts at trading, determined what worked and what didn't and will formulate a strategy and plan to reach my goal.
There are two primary reasons that this goal has not been accomplished.
1. LACK OF FOCUS
I have never made a serious commitment to it. For the past 7 years I have been involved in Internet marketing, and have only dabbled at stock trading, even though it was what I always saw as my real passion and my most likely fastlane vehicle.
2. LACK OF DESIRE TO DO THE REAL WORK
I used to play a lot of golf. And at one point I was taking it quite seriously. The fact is that if you want to improve as a golfer, you need to be on the range a lot, which isn't the most fun. Actually the golfers who are successful, do find practicing on the range fun. But not only that, it requires ruthless self examination. If you analyze your play and you are losing strokes from the second cut of grass, you must spend hours working on shots from the second cut of rough, and guess what, those are the shots you hate practicing the most.
A trader's job is to create hypothesis about the market and the opportunities that it is presenting, to take trades based on those hypothesis and then to manage risk. That's it. But there is still so much that can go wrong in that simple job description.
My analysis of my last few years of trades and hypotheses is that I am very good and developing trading ideas and good enough at managing risk, but where I have my biggest opportunity for improvement is with actually executing the trades based on my analysis.
It seems as if somewhere between the perfectly viable ideas that are based on my years of learning technical analysis, and the actual act of placing a trade that is in harmony with my idea, the wires get crossed, and I either talk myself out of my idea (most likely due to fear) or neglect it due to having too many distractions and other things going on in my business life.
The evil step sister of talking myself out of my solid trade ideas is to take reactionary trades, based on spur of the moment emotions like fear of missing out on a big move, or greed, which are the trades that end up being complete traps set by more professional traders.
So unlike almost any other professions, I believe the primary work of becoming a professional trader, at least for someone with my make up, it between my ears. Finally I get this fact. I've read at least 10 books on the importance of being consistent, having a plan, being disciplined, etc in trading... but HOW?
I believe the answer is to work with a trading psychologist and unblock or rather re-wire the emotional patterns that scramble the signals from the original viable trade ideas, to their execution that results in my fingers clicking the mouse to move my money into or out of the trade.
THE PLAN
So going forward, my strategy is to develop a structure to focus as much of my energy as possible to trading between now and May 1. 2013.
The reason for this public post is to ask for help in holding me accountable to my goal. I am in a financial situation where it really does matter that I make it (which is also probably why I didn't ever take it seriously in the past).
Abraham Lincoln reportedly said that, given eight hours to chop down a tree, he'd spend six sharpening his ax.
The plan is broken into two parts. The first is from now until Dec. 31, and it consists of sharping the ax. This involves clearing distractions, writing a trading business plan, refining my tracking systems, creating a timeline for goals and milestones, and creating a support structure to give myself everything I need to succeed. I may be trading during this time, but it will not be my primary activity.
The second part of the plan, the 120 days part, is part where I focus entirely on the trading process. The plan is set, the strategy for improvement is in place, the money is budgeted and I just strap into my system and go until I can pronounce myself as a professional trader.
The other important thing I realized is that if I want different results, I need to stop doing the same things. One example from this week is that I have started printing out and marking my charts on paper rather than staring at the computer screen. This seems to be much more relaxing and enjoyable and has a nice side benefit that I can refer back to them, to build confidence in my analysis.
I DONE THIS - Week 1's Accomplishments
NEXT WEEK
Simple goal this week, and a big one. Complete the first draft of my trading plan. This will be a lot, all goals, money management, trading systems etc need to be at least roughed in.
Do market structure exercises for SPY, SLV and EURO and formulate trading hypotheses for these markets
Do more trader psychology study and exercises.
.... If you read this whole thing, thank you very much, I'm impressed. My commitment is to update once a week on Saturday from now until May 1, 2013. Even if things are not going well, I will do that. Feel free to kick my virtual a$$ (via PM, on FB or my blog) if you don't see an update by end of day on any Saturday between now and then. Words of support, encouragement and wisdom are also highly appreciated.
If you have any questions, let me know.
Thanks,
Jon
This has been my goal for a number of years, and I feel like I am at a place where in my head I am sick of thinking about this goal and not taking any serious action towards achieving it.
Hence this post.
In order to achieve my goal, I have done an analysis of my past efforts at trading, determined what worked and what didn't and will formulate a strategy and plan to reach my goal.
There are two primary reasons that this goal has not been accomplished.
1. LACK OF FOCUS
I have never made a serious commitment to it. For the past 7 years I have been involved in Internet marketing, and have only dabbled at stock trading, even though it was what I always saw as my real passion and my most likely fastlane vehicle.
2. LACK OF DESIRE TO DO THE REAL WORK
I used to play a lot of golf. And at one point I was taking it quite seriously. The fact is that if you want to improve as a golfer, you need to be on the range a lot, which isn't the most fun. Actually the golfers who are successful, do find practicing on the range fun. But not only that, it requires ruthless self examination. If you analyze your play and you are losing strokes from the second cut of grass, you must spend hours working on shots from the second cut of rough, and guess what, those are the shots you hate practicing the most.
A trader's job is to create hypothesis about the market and the opportunities that it is presenting, to take trades based on those hypothesis and then to manage risk. That's it. But there is still so much that can go wrong in that simple job description.
My analysis of my last few years of trades and hypotheses is that I am very good and developing trading ideas and good enough at managing risk, but where I have my biggest opportunity for improvement is with actually executing the trades based on my analysis.
It seems as if somewhere between the perfectly viable ideas that are based on my years of learning technical analysis, and the actual act of placing a trade that is in harmony with my idea, the wires get crossed, and I either talk myself out of my idea (most likely due to fear) or neglect it due to having too many distractions and other things going on in my business life.
The evil step sister of talking myself out of my solid trade ideas is to take reactionary trades, based on spur of the moment emotions like fear of missing out on a big move, or greed, which are the trades that end up being complete traps set by more professional traders.
So unlike almost any other professions, I believe the primary work of becoming a professional trader, at least for someone with my make up, it between my ears. Finally I get this fact. I've read at least 10 books on the importance of being consistent, having a plan, being disciplined, etc in trading... but HOW?
I believe the answer is to work with a trading psychologist and unblock or rather re-wire the emotional patterns that scramble the signals from the original viable trade ideas, to their execution that results in my fingers clicking the mouse to move my money into or out of the trade.
THE PLAN
So going forward, my strategy is to develop a structure to focus as much of my energy as possible to trading between now and May 1. 2013.
The reason for this public post is to ask for help in holding me accountable to my goal. I am in a financial situation where it really does matter that I make it (which is also probably why I didn't ever take it seriously in the past).
Abraham Lincoln reportedly said that, given eight hours to chop down a tree, he'd spend six sharpening his ax.
The plan is broken into two parts. The first is from now until Dec. 31, and it consists of sharping the ax. This involves clearing distractions, writing a trading business plan, refining my tracking systems, creating a timeline for goals and milestones, and creating a support structure to give myself everything I need to succeed. I may be trading during this time, but it will not be my primary activity.
The second part of the plan, the 120 days part, is part where I focus entirely on the trading process. The plan is set, the strategy for improvement is in place, the money is budgeted and I just strap into my system and go until I can pronounce myself as a professional trader.
The other important thing I realized is that if I want different results, I need to stop doing the same things. One example from this week is that I have started printing out and marking my charts on paper rather than staring at the computer screen. This seems to be much more relaxing and enjoyable and has a nice side benefit that I can refer back to them, to build confidence in my analysis.
I DONE THIS - Week 1's Accomplishments
- Created the timeline spreadsheet from now until May 1, 2013 and started filling in milestones and goals
- Found at least one person willing to keep me accountable (hopefully more will result from this post)
- Developed a plan for measuring trader performance based on questions that I asked professional traders that I know on Facebook (profit and loss is a poor measure of trader performance since luck does play a part in trading. You can make money and still be a bad trader, and you can lose money, even with a perfect trade - so a good measure of trading must be based on other variables).
- Pulled out my previous trading plan, ripped it apart, boiled it down and started re-drafting it into something that will get me to my goal.
- Organized my office, my goal is to have a Zen-like trading zone to enable focus and mental clarity
- Read my old business plan docs and put notes on them to carry to new one
- Printed out some charts and did market structure exercise on paper for the first time
- Started purging and cleaning Firefox bookmarks and unsubscribing from any internet marketing newsletters
- Started compiling links to trading psychologist resources and put them on my blog with the goal to find someone to work with during my 120 day challenge
- Started to do exercises to develop more awareness of my current feeling state (being unaware of feelings is the hidden saboteur in trading)
- Met with a friend who it looks like will take over and grow my affiliate business as a Joint Venture project (big goal accomplished to have this off my plate).
- Started learning about Auction market theory and volume at price analysis
- Listened to my first trader psychology webinar
- Did a market structure exercise on RIMM, AAPL and SPY
- Outline of new trading plan completed and started on first draft
- I sold almost half of my investment in a startup that I am involved in, to raise funds and to allow me to de-stress, reduce my responsibility and focus
NEXT WEEK
Simple goal this week, and a big one. Complete the first draft of my trading plan. This will be a lot, all goals, money management, trading systems etc need to be at least roughed in.
Do market structure exercises for SPY, SLV and EURO and formulate trading hypotheses for these markets
Do more trader psychology study and exercises.
.... If you read this whole thing, thank you very much, I'm impressed. My commitment is to update once a week on Saturday from now until May 1, 2013. Even if things are not going well, I will do that. Feel free to kick my virtual a$$ (via PM, on FB or my blog) if you don't see an update by end of day on any Saturday between now and then. Words of support, encouragement and wisdom are also highly appreciated.
If you have any questions, let me know.
Thanks,
Jon
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