I want to be a full time trader. I have been wanting that for some time now. However, I have still not been able to do it. I may have many reasons. Lots of debt, too many responsibilities which may not suit the inherent risk that full time trading as a profession carries. However, if I have to point out one reason due to which I have not been able to do it yet is the lack of a “Master Plan”.
What is a Master Plan?
A Master Plan is a plan for you to get you from where you are to where you want to be. It is the blueprint which will guide you to successfully complete a project/projects which will result in you achieving what you want.
Ok, So how do you make one?
To build a Master Plan, you can follow the following steps:
- Understand the components of the big dream that you have. Compartmentalize the pieces. Break it down into different projects
- Now, break down the projects into tasks.
- These tasks need to be acted upon. List all the steps that you have to complete to finish that task.
- These action steps should be ranked according to the difficulty level. Do the simple ones first.
- Break these steps further and assign a timeline to completing these tasks.
Trading Master Plan
Now, let us try to create a master plan for my dream of becoming a full time trader. Let’s think, what is required?
- Capital fund
- Market Knowledge
- Technical Analysis Know how
- Correct Pyschology
- Positing Sizing knowledge
Capital Fund: Depends on what your goals are and what is risk capacity, this goal will vary for each individual. This should also include a backup fund and at least 6 months of expenses as back up so that you are not tensed about money while trading.
Market Knowledge: I know this is vague. Its hard to define market knowledge but we will have to quantify this so that it makes sense to us. For example, for trading in India, you should have an overview of NSE, BSE, MCX, different brokers, India’s GDP, growth forecasts, upcoming financial events which may affect the market etc.
Technical Analysis: Get a mentor to teach technical analysis, understand the different terms, trading platforms, various set ups etc. Read books on Technical Analysis, paper trade etc.
Psychology: This is perhaps the most important part. This will require a lot of patience, reading and experimentation to getting to know yourself. Observing one’s behavior, understanding what works for you.
Position Sizing: This is the risk management or money management part. This is essential for trading and for continuing to do for a long time.
All the above are just a description of what is required to do to succeed as a full time trader. However, each project will have its timeline attached to it. For example, Technical Analysis know-how may be gained within six months, but the capital requirement may take 3 years, depending on what you need. Every item on this list needs to analysed further and be worked on each day to give a shape to the Master Plan.
There is no need to complete this planning in one go. Sleep over it, come back to it, review it and modify if necessary. Also, the important thing to remember here is that this is just a plan, not your goal. You need to follow the plan to get to your goal. The plan is important, the goal is more important. If at any time you feel that you need to modify the plan to align it with your goal, do so without hesitation.
What is your goal, your dream? Make a Master Plan for it today!