Setting Your Own Objectives - Part 1:Self-Assessment

I've promised myself for awhile that I was going to make the time to go through the process of creating a trading plan outlined in 'Trade Your Way to Financial Freedom,' and tonight I'm going to follow through. I'll admit that I can't see the value in all steps of the process at this time, but I'm certainly willing to give it a try and see what I come away with. I don't expect to agree with everything I read, but I will learn from it regardless.

How much time during the day do you have to devote to trading?

• One to two hours, mostly after the market is closed. I can sometimes look at the market during the day, but not on a reliable basis.

When you are trading, how many distractions can you expect to have?

• Quite a few while the market is open, my primary focus is my full time job. At home in the evenings I am usually able to work with minimal interuption.

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?

• As much time as it takes. With a wife and a young child I have to balance my time, but this only means it will take me longer to spend, say, 100 hours of study - that might take me ten weeks where someone else could cover it in half that time. I will still get there, just more slowly

What are your computer skills? What skills do you need before you begin this trading venture?

• My computer skills are above average. Potentially I could write my own database and/or programs if this would be beneficial. I'm not sure what skills I need until I learn more about formulating a trading plan.

What do you know about statistics?

• I took some courses in college for my finance degree, but that was over ten years ago. I have no practical experience, and would need to brush up in this area

How would you rate your market knowledge?

• One step above novice. I know more than those who know nothing. I've done extensive reading on successful traders, particularly those who 'inspired' Bill O'Neil's CAN SLIM method. Most of my attention is paid to price and volume action, particularly weekly charts. I also watch the 10, 20, 50, and 200 day moving averages and the Relative Strength line, along with other signs of accumulation and distribution. I do not make use of other technical indicators at this time.

What are your psychological strengths and weaknesses, especially in terms of trading system development?

• I have a great desire for a 'mechanical' system - I would be much more comfortable if choice was replaced by a set of rules. I think this is a strength.
• I am a good starter but a poor finisher. I tend to be distracted by each new potential method or improvement, and this could prevent or delay me from finalizing a system. It could alternatively be a positive because I will be looking for constant improvement.
• I believe I will succeed - I think this is the more important ingredient.

How about your strengths and weaknesses in terms of personal discipline?

• I lack patience and discipline, both of these will be needed for long term success.
• I am humble and self-aware - I am able to identify my faults and therefore improve upon them.

Do you tend to get compulsive, do you have a personal conflicts, or do you have any emotional issues that constantly crop up, such as fear or anger?

• Yes to all of these. I sincerly hope that I can improve my entire life experience as well as my trading by getting a handle on my emotions. I am apt to get 'excited' by trading when it's going well, and depressed when it's going poorly. That's why I started the blog, why I do all the reading I can, and why I'm working on this trading plan now. I want to mitigate (if not eliminate) these weaknesses and accentuate my strengths.
• Fear and anger have definately driven far to many of my actions in my life, and I don't think things have ever gone well when I've acted on one of these emotions. Certainly not in trading.

Based on your personal inventory, what do you need to learn, accomplish, or solve prior to beginning trading? How will you do that?

• Well, it's a little late now, as I've been trading for nearly two years now. It's very clear what I need to learn - to take the emotion out of my decisions and run my investing like a business.
• I've already taken some steps toward this end, like this blog and reading this book and creating a trading plan. I'm not sure what will come next, but I'm open and looking for ways to improve always.