JumpOff said:
Db, how specific do you think a person needs to be about this? Here are some examples from general to nitpickish. At what point on the scale does further refinement become useless:
- I want to make a lot of money
- I want to make my living as a trader
- I want to make $xxx,xxx,xxxx. per year
- I want to make $xxx,xxx,xxx. dollars per year with a minimum drawdown of x,xxx.
- I want to do all of item 4, in no more than 6 hours per day of trading
- On monday -Friday (excepting Thursdays)
- While trading a 15 min chart on the QQQ's
- using the ross hook (or fib, or whatever strategy)
And are these even the types of "why are you trading" questions you had in mind. - As I look over them, they look more like a "how and what" list, rather than a "why" list.
A "why" list might contain statements like:
I want to trade so that I can earn a better hourly wage, and spend more of my time doing x,
I want to trade because the markets intrigue me - and I need to solve the 'puzzle' of how and why and when they move.
I want to be a successful trader to prove to my exwife that I can earn more than she can.
I want to trade in addition to my regular job, so that I can build up a trust fund for my children's education..
Is this what you are getting at?
JO
Some of it. Essentially the questions that I asked when you began your journal. Some of them can't be answered by someone who's just starting. Some can prompt only general answers at the beginnning but will prompt more specific answers as the beginner advances.
But even the rankest beginner knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X. And it shouldn't take him long to figure out whether he wants to do it only in the morning or only in the afternoon or only on Tuesday, and later whether he wants to do it by scalping, swing trading, position trading, daytrading, EOD trading, via fundamentals or technicals and so on.
The beginner ought to know how patient he is. If he doesn't, he'll find out real quick. He ought to know how adventurous he is. Whether he's a leader or a follower (though most people probably think they're leaders). Whether he wants something "turnkey" or whether he'd rather create it himself. Whether or not he's a reader. Or if he learns better via seminars or webinars. He ought to know how he handles loss, how he handles "failure", how he behaves when things don't go as smoothly as he had expected (how one behaves as a trader is not that different from how one behaves in life: if you're a control freak in one, you're likely to be a control freak in the other, or a wimp, or a whiner, or a cowboy, or a dominatrix, or a Machiavelli).
Most people say they trade because they want to make money. But an awful lot of men trade because they want to show their fathers that they're not such losers after all, or the boys who always chose them last for games in school (quite a few women do it because they want to play with the boys; unfortunately, they often do a better job if they don't have the ego issues). Or it seems like more fun than Vegas.
Then there are one's characterizations of the market, which are essentially the same as those with which one approaches life: is a battle or a war? a competition? a game? a puzzle? Are you out to kill somebody? beat somebody? Or are you out only to detect the flow and slip into it, riding the waves as if you were sailing?
Again, not all of these questions can be answered at the beginning. But it should be clear that, unless one addresses them at some point in some way, to decide that one wants to trade CANSLIM or be a scalper simply because he'd been told or had read or heard that one could make a lot of money doing one or the other or some such would be ludicrous.
A trader once wrote that if you want self-enlightenment, you can go sit in a cave somewhere with a Buddhist guide for fifteen years, or you can trade S&P futures.
