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It is half way down the mark. But I am so glad that I have received a number of positive feedbacks from our readers about this 7-part series. In particular, I could not sleep after reading David R’s comment in Joe Contes’ Discussion Board. I wish to thank David for such an excellent remark about how my article has helped him regain his confidence after a few setbacks at his initial trading career. Yes, money is important, but at times it is this type of non-pecuniary return that I look for as a writer. I feel good after hearing our students tell me how their lives changed by adopting a “dare-to-be-different” mindset and, of course, taking action.

So, what have we discussed so far? You know you need to have a strong self-belief. You need to understand good traders’ habits. You must have ‘SMART’ goals. Let’s consolidate these three things into Credential #4: Having a Master Plan. I understand my mentor, Mitch Genser, will be flying from Spain to Santa Clara this June to present his topic "Mastering the Trading Plan." Don’t be confused with what he will say at OASIS and what I am going to say below. As this is a business, having a master plan is critical, like all companies which must have corporate constitution (also known as memorandum and articles of association). The master plan serves as a blueprint that tells you how to run this trading business.

Imagine you are now tasked to set up a business. Please don’t tell me you don’t need a plan. Unfortunately, many newbies approach this business just like that. After attending a class or reading a book about trading, they will quickly fund their accounts and start trading live. Successful Optionetics students have a master plan where they lay down certain criteria to enable them to run this trading business. In fact, this is the major take-away from the Elite Trader Program where we spent a year with George and Tom. If you think Elite Trader Program is just an advanced options class, you are wrong. It’s much more than that.

So, what should you have in your master plan? Good questions. Let’s explore some of the potential areas you should address.

What is your business schedule?

Do you operate round the clock or only a certain point of time each day? One newbie from Singapore who recently completed a day-trading course from her mentor told me that her hands would feel itchy if she does not trade everyday. She saw her mentor who is a successful day trader in Singapore, and she thought by completing this course she will be able to day trade successfully. I beg to differ. What is interesting is that she told me she has to place a trade even if she is not feeling that way. To me, this is not an ideal way to approach this business. Our operating hours depend a lot on our other commitment.

Suppose you have a day job and work 8 to 10 hours a day. What do you think you should do?  Should you stay up to do day-trading?  I had been through this because indeed day-trading can be exciting. But I know it won’t last in the long run. Chances of making mistakes will increase. So, I stopped day-trading for a long time. In fact, I operate my options trading business only 1 hour per week. I don’t really care what the market is doing each day. In any case, please decide for yourself your own operating hours, taking into account your other commitment.

Which is (are) your targeted market(s)?

Is your operation restricted to a particular jurisdiction such as the US or a few jurisdictions? Is your operation restricted to a particular sector or a couple? Imagine you have absolutely no knowledge about the US market but since you are living in Singapore, you are more familiar with the Singapore market. There is nothing wrong with focusing on the Singapore market.  However, do understand that when you realize that the opportunity offered by the Singapore market is limited, you would need to venture overseas. So, be prepared to do business in another jurisdiction.

Are you financial literate? Do you read business news everyday? Maybe by reasons of your job, you have interest in a particular sector. You may be able to find a niche and accordingly, you may wish to consider specializing in a particular sector. Don’t be a Jack-of-all-trades. In fact, successful Optionetics students I know only concentrate on a few sectors. Like myself, I don’t really trade stocks but looking at commodities ETFs such as oil and gold. I don’t know what the pharmaceutical stocks are doing. So, pick an area or a few of your interests and pursue knowledge within your area of specialism.

What is your staff recruitment policy?

You are the Chief Executive Officer of your business but you can’t operate it alone. You have a life after all and you need to spend 1/3 of your time to sleep. So, you need resources. Mr. Adam Khoo is a young Singaporean who became a self-made millionaire at the age of 26. In one of his books, he gave his readers a compelling reason with which I totally concur. A lot of us are constantly looking for saving a dime, and thus we tend to do everything ourselves. Very often, we disregarded ‘opportunity cost.'' Imagine that you spend 8 hours a day in order to do the market research and look for trading opportunities, and let’s assume that you can earn $500 an hour by doing other value-add activities. By doing the market research yourself, you lose $4,000 a day. Imagine you do this 4 times a month; your total opportunity cost will be $24,000. By recruiting a staff and paying them anything less than $24,000 a month, the equation will still make sense because you can be engaged in value-add activities using these 32 hours, and make more money from that. In fact, in our 2-day seminars, a lot of newbies have told me that they cannot afford buying the trading tools due to budget constraints. I truly understand that and ask them to consider buying these tools when they are ready. However, if you are now an experienced trader, and if you are still spending long hours to do everything yourself, I would say that you have wasted a lot of time and many money making opportunities. So, let the tools help you.

How do you assess your operational performance?

Apart from what Mitch will discuss in his OASIS presentation on building a master trading plan, i.e. you need to have a trading plan for each trading opportunity, do you have any appraisal or feedback sessions on a regular basis? This is to enable you to review your business performance. If you don’t, please incorporate this into your business plan. You may agree with me that reviewing the past performance and learning from the mistakes is important. These mistakes may be the result of a lack of discipline, psychology breakdown, or unforeseen circumstances etc. In any case, I believe that you will improve your trading performance by learning the past mistakes. So, please conduct feedback sessions and review your past trades on a regular basis. Yes, sometimes you will have a few good trades. Please reward yourself reasonably so that you will keep up with the excellent work.

What is the Research and Development (R&) plan of your business?

The market keeps changing and so is your business. You need to devote part of your business profits into R&D.  This means that you will need to continue educating yourself and stay sharp with the ever changing market conditions. Don’t think that after attending a 2-day intermediate class is the end of your education. Never. In fact, some of you may know that I started my forex education 6 months ago because option trading is so boring that I only need an hour a week to manage my options portfolio. I started reading books and attending classes. I did it the same way I did my options education. I learned to stay sharp with the economic news, not only for the US nowadays but also for things happening in Australia, New Zealand, London, Frankfurt and Tokyo. I also built a business plan for my forex business. To me, investing in a fixed deposit may earn you miserable interest. Investing in my BMIC system may yield a 10% return a month. But investing in yourself will give you an infinite reward over time. And yet, human beings are interesting species. Most of them will buy big cars and the latest tech gadgets that are depreciable assets. After 2 years, I finally bought a new PDA cellphone yesterday. Although it is a depreciable asset, it is actually my mobile trading tool, as I can use it to trade forex online regardless of where I am. So, in one way, it is actually my employee.

I think there could be a lot more to say but due to the limited space I have, I am afraid I have to stop here. Do let me know if you have any suggestion or feedback. Let me know what you feel after reading the above. Speak to me in person at OASIS so that I can learn from you too.

To access previous articles written by Jack Wong, please click here.

Jack Wong 
Staff Writer
Optionetics.com ~ Your Options Education Site

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