YOUR TRADING GOALS

Its important to get your perspective clear. 

You may have a goal clearly in mind, but it must have three important characteristics:

1) Your goal must be realistic.
2) Your goal must be attainable.
3) Your goal must be measurable.If you want to be a successful trader, the first thing that you need to do is to set your trading goals.

In specific, the goal cannot be winning every day. It should be defined in objective terms. Examples:

- Trading will be my livelihood and I will earn Rs 50000 per month.
- I want to earn Rs 500 a day.
- I am happy earning Rs 10-20000 a month. And since I am not dependent on trading, it wont kill me, if I dont trade everyday.

Now these are specific goals. They will be realistic, if these are achievable with reasonable probability with the capital that you deploy. And of course these are measurable, since you have defined a money value for each one of them.

Next based on your goals, you need to determine the means to the goals. Will you day trade or position trade - short or long term? If you want to spend all your time in trading, experiment with day trading or short term position trading. If you are more like an investor and see returns based on steady trends, go for long term position trading.

Are you a day trader or positional trader. The implications are different in terms of trading styles. 

If you are a day trader, you need to have your trading setup and margin arrangements finely tuned. You need to have access to real time data sources and preferably views of price charts. You also need to have competitive and low cost trading platforms. Brokers can be your friends but they can also be sharks while you trade. If you have a high transaction cost, your broker will be laughing all the way to the bank if you do high volume intraday trading. 

You need to have a good trading platform. Good means, it must have the look, feel and responsiveness of a brokers terminal. Do not use web based platforms as the response time is usually slower than PC software based platforms. When you punch in your order, the response must be within milliseconds so that you do not miss out on trading opportunities. The software must show you a record of time stamped transactions that you do in a day, your pending or unexecuted orders and the trades that you did. It should show you your current holdings, and the profitability of your intraday positions with mark to market (MTM) profits.

If you are a position trader, you may want the ability to place post or pre market order in addition to the above. Your delivery brokerage costs must be low. You may want to understand hedging principles so that overnight positions risks can be managed.

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