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Writing a Trading Plan Part 1
Thursday, March 09, 2006
2006 Trading Plan
 
The first step in developing my trading plan is to answer the following important question:
 
Why am I trading?
 
The primary reason why I started the Forex Project is to determine if trading as a career is a viable option.  Before doing this, I followed the financial markets because I found it interesting and also necessary since my job as a IT professional on Wall Street required at least some knowledge of it.  Most of my investments were in mutual funds and I dabbled in the equity markets here and there.  I was reading the Wall Street Journal one morning and happened to stumble upon an article about a Forex Day Trader.  I wrote about this experience a while back and will include it here.

This summer I was browsing the Wall Street Journal when a headline caught my eye.  I don't remember it exactly but it stated, "Disc Jockey Plays the Hits by day, Trades Forex by Night."  It turns out that this DJ worked for WDHA, a radio station down the road from my current job.  I continued to read how he was a "Forex Moonlighter" and was going to eventually trade full-time.  This DJ stated that he made $170,000 trading last year and this year he was planning on making more.  It went on to say that he did this all in the comfort of his own house on the internet.  It also stressed the difficulty with being successful doing so.

Either way, this got my attention.  A couple of hours later I went to the Barnes and Noble and tried to find any book on Forex I could.  That book turned out to be James Dicks, "Forex Made Easy: 6 Ways to Trade the Dollar".  It turns out that this book was nothing more than a glorified sales pitch.  He kept mentioning his "4X Made Easy" software.  Either way, it started me on my way so for that I'm grateful. 

Working in corporate America for the last 8 years or so have opened my eyes to the ways of the world.  The chief concern of most corporations are how they can increase profits for shareholders.  They won't hesitate to outsource jobs overseas if it's going to decrease expenses.  One day, they may feel the need to send my job overseas.  I understand that it's just business but I have to think about myself and my family.  I don't want to have to rely on another to provide for me.  I feel like trading can provide me with this financial independence and freedom. 

This isn't the only reason why I'm trading.  In addition, I enjoy statistics and charts and find trading an overall enjoyable experience.  The appeal of trading from anywhere and from home is also a reason why I'm trading. 

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