The Daily Market Forecast... Trade Plan Part 3

Wednesday’s Blog Results: Neither suggested level triggered.

Quick Tip: Trade Plan Part 3

You’ve made two decisions so far, time devotion and style. You’ll treat this like a business so let’s be professional and examine the startup capital required.

Technology: Computer, printer, cell phone, back-up power supply, reliable high-speed internet access, WIFI hotspot (backup internet access). If you’re day trading you’ll need multiple monitors, the fastest available internet access, and a hard wire connection, not WIFI. You probably have this technology already but if not, go shopping. The software you’ll use will probably be provided for free by your broker. If not, consider Ninja, eSignal, or MetaStock.

Education: Learning trading is not like riding a bike. You’ll need continuing education, coaching, and support. This investment is worth it at almost any price. Why? Because without it you’ll likely lose far more making mistakes you should have learned to avoid prior. Excellent online educational/coaching resources are plentiful and available for a few hundred dollars a month.

Trading Capital: Consider this true risk capital, meaning it’s money you don’t need and can truly afford to lose. It’s not that you’re planning on losing, it’s more psychological. If you’re trading with your only savings you’ll likely fail. Use common sense. Your choice of style gives you some guidelines on how much is required…

• Position traders are longer term investors and will generally require a significant account. You’ll be diversifying and that means many positions, potentially across several markets. Six-figures makes sense.
• Swing traders are shorter term traders and will likely be using leveraged assets like futures, forex, or options. This allows you to start with less capital. Five-figures makes sense.
• Day traders use the same leveraged assets and turn the trades quicker. This allows even less starting capital, maybe as low as $5000.

As mentioned in yesterday’s blog, you may have to re-visit your choice of style given your budget. Tomorrow you’ll get a primer on which asset class fits the decision matrix you’ve made so far.

Today’s Best S&P Futures Turning Points (same as yesterday):

Short Level: Sell 4412.00 stop 4417.25.   

Long Level: Buy 4306.50 stop 4299.25.

Trade well,

Mike Siewruk

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