Back at it again folks. I'm going to continue to giving my responses/thoughts on the questions posed in Episode III's video. Unfortunately I am still too uneducated on some of these topics to discuss or lay out my thoughts so I will simply leave them blank with some notes to my future self. Next up!
Money management Criteria
I don't watch this guy’s videos (I might in the near
future) so I'm not real sure what he is talking about here. Will have to dig
deeper into this subject.
Strategy Monitoring Plan
He talks about "How are you going to know that your
strategy stops performing in the manner that it’s supposed to."
Some things he says he might look at are: Ave. Win/Loss Ratio, Ave. Profit/Loss
etc. My questions is when and how often are you going to take of look at these
performance measures? After every trade? Every week? Monthly? I can't see it
being helpful after every trade knowing that one trade doesn't
determine whether you are successful or not. Also is this a quick
think that you can accomplish or is this more like a "Lets step back and
do a full analysis of my performance" kind of thing. Plus is this process
the same every time? Again all this is over my head at this point so I'll put
this on pause until I can speak knowledgeably on the subject.
Strategy Adjustment Plan
I have most of the same concerns and
thoughts about this because it’s so similar. As he says in the video I think it’s
important to not change the strategy unless all signs are pointing to do so.
Again a few bad trades doesn't mean your entire strategy is wrong and should
only adjust strategy when absolutely sure it has a fault.
Trading Software/Budget
I think this is going to be pretty important. Your tools of
your trade almost always have a large impact on your performance in
any career field. I have looked at some platforms and there are a bunch of
factors that play into which one will fit me and my needs. As for my budget, I
guess he is referring how the monthly fees will factor into my budget and
my profit margin. In addition to can I afford to pay for these services while I
may not be making a profit right off the start.
What broker will you use?
For some reason I thought that depending on the trading
software/platform you chose dictated which broker you would work with. I guess
that's not quite true. I also wonder about other tools that might be out there
to increase my potential success. Lots to learn!
Will you add money?
My initial answer to this is yes. As I don't currently have
a ton of money to invest with in the first place I see myself continuing to
save and put that money in my brokerage account. I know is has some issues so I
will have to recognize them and mitigate as
much as possible.
Will you reinvest profits?
Yes, at least at first. Again I don't have a huge lump of
cash as we speak. I would like to reinvest until I meet a goal that I will set
before I start trading. For example say its $10k. I will reinvest all profits
until my trading account contains $30k. Then from then on I will remove all
profits I make each month. This way I will always begin the month with the same
$30k not risking my entire account each month. I think this makes sense however
it’s again something I'll have to educate myself on.
Can you support yourself?
I don't plan to quit my job so yes I can. I also am going
into this with the knowledge that this money is EXTRA MONEY that I do not need
to pay the bills. This is important because there is no pressure to make money
trading.
Starting Balance
This is a big question mark for me right now
mainly because I don't know what is sufficient to be successful. It also
heavily depends on me saving this initial money up over the coming months.
Easier said than done. Finally I know there's a lot of restrictions, mainly
minimum starting balances, when it comes to opening up brokerage accounts that
I must meet. For now I'll leave this unanswered but know I'm no money
bags.
So there ya go. It’s
clear I have a lot of work to do on these questions. Lots of them were left
half answered and the others were ignored. I'm not completely confident
that this is a complete set of topics that need to be addressed but it’s definitely
a good start. I'll start tackling each one in the coming weeks.
Tomorrow is hump day ...
-RJL
*CAUTION*
The author of this
blog is inept in the writing of the English language. He has no clue what he is
doing and is sorry for the run on sentences, countless typos, horrific sentence
structure, lack of vocabulary, blatant misuses of pronunciation and overall
suck. He doesn't proofread and is too embarrassed to ask others to do it for
him. He offers his sincerest apologies for your bleeding eyes.
*CAUTION*
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