Business Resources

Everything from your computer to your time comes under your available resources.

You will need to take an inventory of your available resources. A list of resources will help you to determine your style of trading, what markets you can trade, how often, and so on, and will include such things as your computer, computer skills, software and hardware, time, available funds, trading skills, type of internet connection etc.

Let’s look at them as categories: Time, Money, Skills, and Operations.

Time: How much time per week do you have available to run your business, to expand your business, and to manage your business? The amount of time you have to devote to trading is going to determine the sort of trading you do and the level of your realistic expectations. Someone who only has an hour or two a day is obviously going to find it difficult to day trade, but at the same time, if they want to become a proficient trader who makes consistent returns of 10% or more a month, and do it in twelve months, then they had better use that 2 hours wisely. They will have to learn to make those two hours as productive as possible to learn what is needed. Someone with little time or inclination for analyzing will also be suited to a more mechanical type of trading system.

Money: It is essential that you get it clear how much money you are making available for trading. Someone with only a few thousand dollars is not going to be able to trade many of the futures markets; it’s as simple as that. A small trading account would also restrict the amount of stock trading you can do. In fact the less you have the more leverage you will need to seek in order to minimize how much of your trading capital is required as margin. Of course, with this comes added risk. Someone with a small account size may be better suited to trading CFD indexes, or forex mini lots, as examples.

Skills: These are your skills as a trader so far, and any other skills required operating your business. Skills would include experience so far, how to place a trade, your understanding of how your broker functions in matching your order with another party, how your particular market functions, how your charting program works, your computer skills and ability to fix problems, mathematical skills, recording and journal entry skills, accounting skills etc. Be aware of what is required of you and if you are weak in an area either improve or find someone who can do it for you. For example, if you have very little computer knowledge, what are you going to do when your computer freezes up and wont come back on (imagine that happening and you hadn’t placed your stop yet!)? Do you have a computer technician handy?

Operations:  Things like software, hardware and anything used to run your business. Internet connection speed, size of your computer, charting software, its reliability & system requirements, accounting software, software for journals and reporting, software for screen shots or video shots, and so on. Let’s take your Internet speed. I can tell you that day-trading Forex full time will not be possible with a dial-up connection. These are things you’ll need to consider.

Time

How much time per week do you have for your trading business?

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What are your best times of the day and which days?

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How much of this time can you expect to be highly productive and involve little if no distractions?

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How much of that time you have available each week, do you want to spend on the following?

(Remember that someone who has 40 hours a week to trade and devotes all of that time to trading, will take far longer to reach their goals, than someone with similar goals and available time, and who devotes 5 of those hours to managing their business, and 10 to studying the successful traders of this world.)

Trading? ________________________________________________________________

(This is actual trading, and does not include reviewing, which comes under managing. It includes finding opportunities, drawing up plans to trade those opportunities, entering, monitoring and eventually exiting the trades.)

Managing? ______________________________________________________________

(This includes reviewing each and every trade, as well as policy analysis, monitoring outcomes, managing records including financial, self-analysis, logs, schedules etc.)

Expanding? _____________________________________________________________

(Part of the management process involves reporting on your self, after each trade. It’s the job of the entrepreneur to find solutions to problems that occur, especially re-occurring ones. This is what enables you to expand.)

Money

How much do you have available for trading? __________________________________

Can you afford to lose all of this? ____________________________________________

Do you need to live off some or all of the money you plan on making from your trading business, and if so how much?
 
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What are your actual or projected running costs? Don’t include commissions here, but rather streaming costs, Internet connection, electricity for your office, accountant etc.?

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Skills

Have you done any trading at all (whether paper or live trading)?

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What markets have you traded and for how long (whether paper or live trading)?

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What courses, seminars, and books have you studied that have been about trading or investing?

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The following can be answered with Poor, Average, or Excellent.

How are your computer skills? ______________________________________________

How are you math skills? __________________________________________________

How is your writing, or typing skills? _________________________________________

What are your organizational skills like? _______________________________________

How well can you operate your charting software? _______________________________

If you use an Internet broker, rate your ability to use it for all of your trading needs.

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If you use a broker over the phone, what’s your relationship with your broker like?

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Operations

By answering these sorts of questions you make it easier to make informed decisions, such as, will your computer handle the requirements of a brokers trading platform?

What is your Internet connection speed? _______________________________________

How old is your computer? _________________________________________________

What are your computers memory size, RAM and processing power?

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How may monitors do you have? ____________________________________________

Have you got the latest version of your charting software? _________________________

Have you got accounting software or does your Accountant handle all of your financials?

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Do you have screen capture capabilities? ______________________________________

Do you have a way to file your information including pre and post trade information, such as excel or word etc?

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Move on to Step 2 - Module 4 > Business Assets & Liabilities