Step 2: Study the facts and data of where you are now. You’re trying to see , sketch, measure and understand the current pattern as an input into Step 3.
Facts – Data – Where am I now
Business owner in an industry that has taken a turn that if I am not careful will make my role redundant or too expensive, due to technology and a larger work force globally. Plus, businesses are making efforts to spend less, so budgets are being cut. There is merger and acquisitions all over the place, as people try and consolidate and get a better deal for their customers and shareholders. The fact of the matter is , I could try really hard to make my current situation better in the industry that I am currently in but my heart is not in it as the people I work with have little to zero respect for anyone else other than themselves. I do not want to be here for any length of time as the job is not what I first knew and the people are not getting any better.
I have been experimenting, learning, testing, trialling, trading for 7 years. I have made some very large mistakes, I have learned from them. I have learned many good things and have a good knowledge of Technical analysis. I have no formal training or industry experience within the trading world. I have found people to show me how they trade and those people have all gone to the side lines or no longer trade themselves. I know trading is hard but I have witnessed how easy it can be for myself and I know the pitfalls of how to make it hard on myself.
I have in 2018 a profit factor of 1.21 and a 60% hit rate for shorts and longs. The fact if the matter is that when I am undisciplined I hurt my profit factor a lot. I have had no lucky wins, only foolish losses. However, I am getting better and by the end of 6 months I am imaging a profit factor of 1.40 with a 60% hit rate. In 3 years time a profit factor of >2 and a hit rate of 60%
My discipline is shockingly bad, though each day I try and make it a tiny bit better. My hope is that my trading discipline is in a good place for when the current job I am in vanishes. As of June 2018, I will be trading as though I have no other means of income.
To live the life I do now, I need to earn after tax £250 per day , so in trading days I need to average (20*250) £5k a month.
$5k per month if that equates to a 2% increase on the account , my account needs to be >= £250,000
£250,000 * 1.02 = £255,000
I do not have £250,000 in a trading account
Currently I have a £50k account , so the reality is I either need to be more profitable per month, which in turn would mean I trade larger or be more ruthless and efficient or trade more. I would hope with discipline comes efficiency, without added stress of trading bigger or more frequently.
I am with a firm where there is a defined career path to a larger account size, and to achieve a larger account size I have to make 10% on £50k and then another 10% on £100k to be trading a £250k account. Unfortunately there is a profit split on withdrawals so in reality to take the full £5k I’ll need a bigger account than £250k if I stay on this route.