Trading the worlds financial markets means many different things to many different people. For some it's a hobby, for some it's simply another gaming channel to compliment their casino visits, for others it's a dream to trade the markets full-time and something they hope will one day be a way of supporting their lifestyle.If you fall into the latter category, then this section will hopefully provide you with a roadmap which can help you develop your trading into a full-time profitable and rewarding way of life.
Starting any business requires similar steps - from the early research phases, through to developing a product, to capitalisation, execution and to reporting and enhancing the performance of the business.
Many traders will have ideas around the 'product' that they are developing - for example 'I want to scalp the Mini-sized Dow using a breakout strategy'. This is the first obvious step that is taken when developing an interest in trading. Numerous articles and books have been written on trading strategies so we will not go into any great detail on this. But this is simply a tiny piece in a much larger jigsaw that needs to be completed before you will have the tools and skill to run your trading as a business.
Readers may arrive at this page at a number of different phases in their development. I would recommend you briefly review the sections you have already covered and focus on the sections that you are still working on. For example you may have a successful trend trading swing strategy that is proving profitable. But do you know what your Win Loss ratio is? - Do you know whether your Win Loss ratio is getting better over time? If it is do you know why its getting better - perhaps your stop placement has improved, or perhaps the markets are simply trending and this suits your strategy. Do you have a plan to stop trading on a monthly / weekly basis based on Stop or Targets being hit? If you do, do you execute this piece of the plan efficiently or is it more a case of 'finger in the air?'
The aim of this section is to help you understand exactly where you are in the development of your trading business and to explain in great detail how I developed my business step-by-step. The areas we discuss are:
- Developing a trading strategy - I will explain the basic steps and show you how I developed my 'Swing Trading Trend Following Strategy'.
- The Trading Plan - I have published my 2008 business plan so you can see the sections that I covered which include;
- Reasons for trading
- Office set-up
- Current State Analysis
- Financing Requirements
- Getting to Full-time
- Trading Strategies
- Money Management
- Disciplines
- Reporting
- Money Management - I explain the importance of money management and detail how I manage my cash.
- Daily Disciplines - Possibly the most important part of a trading business. This section explains what I mean by 'Daily Disciplines' and why they are so important. I have developed a decision tree that helps me to execute my daily disciplines mechanically.
- The Feedback Loop (Reporting Performance) - So the business is up and running and you have begun trading. How good are the records you are keeping? Do you know how you were feeling when you placed that Platinum trade on 12th December 2006? What market seems to suit you and your strategy the best? - All these questions are absolutely vital in the development of your trading business. By keeping good records you will have an edge over those that do not.
