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Author: Doug Newberry

Article: If you want to be a good trader you need a system. However, in order to have a system, you must have clear objectives. Are you investing money as a hobby? Do you want to make money for your retirement? Consider your goals carefully. Let's consider two different trading objectives. In the first scenario, you want to double your stock portfolio in 15 years. If you only take a few hours on Saturdays to be a stock picker and manage your accounts, you'll be able to make your goal. In the second scenario, the objective is to take 200,000 dollars and double it every year. Of course, you'd need a much more active trading schedule in order to meet this goal. Saturdays won't be enough to help you make this sort of money. You're going to need more experience as well to begin making money. Consider these few questions to help you narrow down which trading style you prefer. How much capital are you going to have as you begin investing? How much time will you be able to set aside for trading each week? Which markets are you interested in specializing in? How much do you want to make every year? Do you want to live off your earnings or grow your account (you may be able to do both)? The problem with these questions is that you may have a difficult time knowing what sort of plans to have for your future trades. You may not know what you're capable of until you pick yourself up by your bootstraps and start trading! Nevertheless, it's important to make a plan anyway. After all, you can always revise your plan once you learn what your trading potential is. Learn to specialize your trading. After all, you can't be an amazing trader with all sorts of stocks from pork bellies to the FOREX. If you're a penny stock picker, you're not going to do as well at large cap stock picking, at least not without prior experience. Knowing your trading objectives is essential for keeping yourself afloat in the confusing market. Set your goals and keep your eye on them. That way you'll be able to make as much money as you need and get the market to work for you. Let's examine a specific example. Let's say you want to bring in $300,000 each year to live from. To attain this you would need to average $1,250 per day. Does this seem feasible? If it seems easy, go for it. Otherwise, lower your goal. If you don't, you'll just sabotage yourself. You need a good, understandable plan with clear objectives. If you don't have one you'll be thrashing around without a lifeline in the ocean of stocks, overcome by the big waves of the market, and it won't be fun. Have clear objectives and plan ahead for how to react when a variety of situations arise. This is the only way to have a chance to reach your goals in the wild waters of trading.

About the author: As a Director of Investing Systems Network, Doug Newberry provides consulting on the conceptual development of stock picker portfolio management software and tools for investors in more than 70 nations.