Boca_Bobby Basics

[boca_bobby]

Options Talk-N-Trade (Options TNT) #5

OK, Time to take a moment to sow the boat and ask ourselves a bigger question. What the hell are we really trying to accomplish here? Most folks have probably heard that most business fail within the first 2 years of inception. We should probably ask ourselves why. Many of these businesses probably had a great product or service they provided. So why did they fail.

9 of 10 times, I would guess that they really didn’t have a good business plan! Well, guess what folks, we need a plan as well. If we just follow along as sheep in the heard, sooner or later we’re headed to the slaughterhouse. We need to carve out our own little path. So we really need to take some time to dig deep and ask ourselves what it is we really want.

I propose a three step approach to creating a plan. Each step needs to be conceived, researched, revised and then executed. We should probably also allow enough flexibility in the steps to allow for market fluctuations. Then when the plan is created, it helps us stay focused on each and every trade. If it doesn’t fit into or plan it, we just let it pass us by and look for other opportunities that may exist. So here we go.

Step One: The HUGE picture

This is what you’re really after. It’s usually a pretty general theme. It should signal the direction you want to go and how long it might take ya to get there. An example might be what we used to do here in the past. Our goal was to take $2,500 and turn it into $25,000 within 1 year. When I first dreamed up this goal I thought it may be unreachable. Let’s continue anyway to see if we can achieve it.

Step Two: Cut the goal of step one into smaller achievable goals.

OK, we got our marching orders; $25,000 in 12 months. Well if we subtract the original starting point ($2,500), we have to make $22,500 in 12 months. If we divide this by the amount of months needed (12 months), we see we need to make $1,875 each month. Holy Cow, that’s still a big figure.

Step Three: Let’s get down to specifics!

How much is needed to make each week? How many trades do we plan to make each week? What are my limits per trade? What are my % gains needed to achieve my weekly goals? I created a spreadsheet for myself. I knew one thing. I saw guys talking about huge % gains of figures like 60% or 100% or even larger sometimes. Could I get to my weekly goals with something more modest? Would consistent gains of a mere 20% get me there? We work this step over and over until the #’s work.

As you can see, we really need to work to create a plan. And sometimes we may find that we have to start all over at step one because our first attempt at a goal is just too unrealistic. Also, our large plan is for a period of one year. This allows us for reflection and rearrangement for the next year. And a final word as well; are we unsuccessful in our plan if we never get to that $25,000 figure we first dreamed up. What if at year’s end, we get up to $10,000? Is this unsuccessful? Hmmmmm

The above examples are just that, an example. This by no means should be your own. The point is to set up a goal for yourself. Create a workable plan. Finally, work your butt off to execute that plan!

Good luck!