- PPF Points
- 7,276
1 Understand why you want to trade.
What do you want out of life?
How does trading fit into this life plan?
What are your beliefs about the markets?
What are your beliefs about your ability to trade the markets?
2 Are you up to the task of becoming a trader?
What personal strengths will you bring to your trading?
What personal weaknesses will impact your efforts?
What is your attitude to risk?
How motivated are you to achieve success?
What are the consequences of failure, and are you prepared to face this possibility?
3 Do you wish to trade part-time or full-time?
Why?
If full-time, how do you plan to make the transition from working for a living to trading for a living?
When will you quit work?
Will you phase it out?
How will you support yourself or your family during this period? What is your fallback plan?
4 What timeframe do you wish to trade?
How much time do you have to devote to trading?
Would you prefer daytrading, swing trading or position trading?
5 What are your goals from trading?
What return on investment are you seeking? Daily, weekly, monthly or annual?
Why?
Consider whether that return is realistic?
Are you trading for cashflow or capital growth?
How long are you expecting it to take for you to learn to trade and achieve this result?
6 Review your financial situation.
What initial capital will you have available to commence your trading?
How much can you afford to spend on trading education?
How much are you willing to lose during the ‘learning’ period?
7 Review your current time schedule.
How much time can you commit to learning to trade?
Produce a weekly planner to ensure that time is always available.
8 Seek advice from a licensed financial adviser.
Discuss your desire to trade, and how it can best be safely incorporated into your wider portfolio and wealth management strategy.
9 It’s time for a reality check.
Accept that approximately 95% of traders fail in their ability to consistently profit from the markets.
Research the cause of trader failure.
Why do you believe that you can be a part of the 5% consistently profitable traders?
Accept that trading success will most likely take longer than you anticipate, and cost more than you expect. How will that impact your plans?
Do you have realistic expectations with respect to the time and effort required to learn to trade, and the returns that are possible from trading?
10 Confirm you have the full support of your family.
Discuss any concerns you may have, and your plans to minimize any negative impact.
Discuss any concerns they may have about the impact on relationships, or your financial future.
11 Trading Psychology.
Understand that you need to take personal responsibility for your trading decisions, and ultimately for your trading success or failure.
Understand that the nature of the markets is uncertainty.
Understand the probabilistic nature of the trading.
What do you want out of life?
How does trading fit into this life plan?
What are your beliefs about the markets?
What are your beliefs about your ability to trade the markets?
2 Are you up to the task of becoming a trader?
What personal strengths will you bring to your trading?
What personal weaknesses will impact your efforts?
What is your attitude to risk?
How motivated are you to achieve success?
What are the consequences of failure, and are you prepared to face this possibility?
3 Do you wish to trade part-time or full-time?
Why?
If full-time, how do you plan to make the transition from working for a living to trading for a living?
When will you quit work?
Will you phase it out?
How will you support yourself or your family during this period? What is your fallback plan?
4 What timeframe do you wish to trade?
How much time do you have to devote to trading?
Would you prefer daytrading, swing trading or position trading?
5 What are your goals from trading?
What return on investment are you seeking? Daily, weekly, monthly or annual?
Why?
Consider whether that return is realistic?
Are you trading for cashflow or capital growth?
How long are you expecting it to take for you to learn to trade and achieve this result?
6 Review your financial situation.
What initial capital will you have available to commence your trading?
How much can you afford to spend on trading education?
How much are you willing to lose during the ‘learning’ period?
7 Review your current time schedule.
How much time can you commit to learning to trade?
Produce a weekly planner to ensure that time is always available.
8 Seek advice from a licensed financial adviser.
Discuss your desire to trade, and how it can best be safely incorporated into your wider portfolio and wealth management strategy.
9 It’s time for a reality check.
Accept that approximately 95% of traders fail in their ability to consistently profit from the markets.
Research the cause of trader failure.
Why do you believe that you can be a part of the 5% consistently profitable traders?
Accept that trading success will most likely take longer than you anticipate, and cost more than you expect. How will that impact your plans?
Do you have realistic expectations with respect to the time and effort required to learn to trade, and the returns that are possible from trading?
10 Confirm you have the full support of your family.
Discuss any concerns you may have, and your plans to minimize any negative impact.
Discuss any concerns they may have about the impact on relationships, or your financial future.
11 Trading Psychology.
Understand that you need to take personal responsibility for your trading decisions, and ultimately for your trading success or failure.
Understand that the nature of the markets is uncertainty.
Understand the probabilistic nature of the trading.