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  • Will You Add? - Stock Picks 101 - Defining Your Trading Objective

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    ake every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings
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    Trading successfully requires planning. The first thing to be clear about is your portfolio objective. This will determine your trading style.

    Let’s take two extreme examples.

    In the first example, the objective is to double the portfolio value in 15 years. In this case you probably only need to manage the account for a few hours on Saturday, once a month.

    In the second example, you want to earn double your $200,000 account every year so you can live comfortably. Even if you did have tomorrow’s Wall Street Journal by today, you’d obviously need a different trading style. Without it, you’d also have to be a pretty experienced trader.

    Here are some key questions for you to ponder.

    • How much do you want to make every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings,

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    p>In the first example, the objective is to double the portfolio value in 15 years. In this case you probably only need to manage the account for a few hours on Saturday, once a month.

    In the second example, you want to earn double your $200,000 account every year so you can live comfortably. Even if you did have tomorrow’s Wall Street Journal by today, you’d obviously need a different trading style. Without it, you’d also have to be a pretty experienced trader.

    Here are some key questions for you to ponder.

    • How much do you want to make every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings

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    p>

    In the second example, you want to earn double your $200,000 account every year so you can live comfortably. Even if you did have tomorrow’s Wall Street Journal by today, you’d obviously need a different trading style. Without it, you’d also have to be a pretty experienced trader.

    Here are some key questions for you to ponder.

    • How much do you want to make every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings

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    ously need a different trading style. Without it, you’d also have to be a pretty experienced trader.

    Here are some key questions for you to ponder.

    • How much do you want to make every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings

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    ake every year?
    • How much money do you have to start with?
    • How much time do you have to put into trading?
    • Do you want to grow your account, live from your earnings, or some of both?
    • Which markets do you want to trade? (Hint: specialize)

    These are not easy questions and there is a catch 22: how do you know what to plan for until you know what you’re capable of? And how do you know what you’re capable of until you start trading? You should not start trading without a plan.

    Still, you need to start someplace. Just be ready to revise your plan if real experience suggests your objectives are… well… unrealistic. However, don’t do this after you’ve experienced a particularly nasty string of losses. Pick a time when you feel you’ve developed a comfortable routine.

    Another tip: Even in trading you need to specialize. The old saying about “jack of all trades but master of none

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