Open Mindedness

One of the biggest I had in trading the past year or so is under capitalization.  The more things I read and hear about traders is that they are either using too much of their account to trade or under capitalized, which really is about the same thing to me.  Multiple professional traders talk about using no more than 1-2% of your account on any trade.

Thus, if you have a $100,000 account, that means no more than $1K-2K on a trade, or was that total in the whole market?  I have to go back and reread Alexander Elder's stuff, listen to some of Norman Hallett, Hubert Senters, John Carter, Mark H. and some of those guys.  Let me tell you this, I don't even have close to that account right now.  Yes, I have multiple times in the past.  HAD!

What about people who have small accounts, like under $10K?  Does that mean you can only trade $100-200? or if it's $5K, then $50-100?  Honestly, I don't really know at this point.  I do know that when you have a small account, there is the fear that you might lose it, which caused me to NOT follow my written trading plan.

Okay, this post wasn't really about that, rather to increase my capitalization.  How do I do that if I'm not trading? 

I don't expect to inherit money, win the lottery (I don't play), or expect any winfall.  Guess that means I just have to go out an earn it, eh?

Someone suggested with my background in engineering, I can do freelance work in mechanical design and charge less than the companies that only want to do high-end stuff for big price tags, where they have all sorts of setup fees and minimums, often equating to thousands of dollars.  The business entrepreneur I spoke with yesterday said I could charge $100-200/hr (BTW, I've never made that much as an engineer, even after 15 yrs) for my services and still be charging LESS than other companies that would do the same mechanical designs.  Most of the jobs would take 1-2 hrs to do, which would be $100-400 for me, which many companies do not want to touch those types of designs.  Why couldn't I do that?

Afterall, I did spend 6 yrs in engineering school, worked for 15 yrs in industry, why not put that further to use than take some low paying job that doesn't really interest me?  I could take the jobs I want and still work around my children's schedule and they would never know the difference as I would always be there for them.  Ten jobs/wk with an average of $250/job, about 10-20 hrs a week to earn about $2500, or $10K/month.  I'd need to give a cut to the guy that gets me the jobs until I earn a good enough reputation for this and get steady business on my own.  Even if I was making $7K/month instead of the $10K, that's still $7K more than I have now.

That's really WAY better than when I was an engineer working for someone else where they dictates my schedule.  Okay, I'll give my manager credit, he often let me set my own schedule to some degree.  God bless him for that.  However, I still had to show up to work 5 days/wk. 

Anyway, that money would allow me settle my divorce aftermath and get back on track with things there, resolve everything completely after negotiations.  After that (or maybe before), I can begin trading again.  However, right now my goal for this is at least $25K to save up.  Since I don't want debts hanging over me, I'll most likely get those paid off so I don't feel worried in my trading.

This may take me a year to do (still gotta live) this engineering thing & saving before the debts/taxes, living, and saving up enough for this account.  Before trading again, not only will I definitely practice, but want to hook up with a professional trader to have him guide me so that I don't blow my account again and can steadily have it grow.

I'm beginning to see the light that it may be possible to have a mechanical design type business, trading, and raise my kids myself - spending the time I want with them.  During the days, I would daytrade futures, but on the weekends or evenings, I could get back into some longer-term options trading or do some of Tim Sykes Pennystock trading, with a smaller account, for things like IRAs ore retirement accounts.

Anyway, it feels a bit scary to get back into engineering, especially since I never thought I would go back.  I didn't think I was all that great of an engineer, but to work for major corporations for 15 yrs?  I must've been at least alright.  Maybe the branching out on my own would allow me to rise to be the person I never thought I could through God working?  Apart from God, trading, engineering, being a mommy -- I could not do any of it well.  I totally need God in all of this and am depending on Him.

I will explore these options and if God wants me in these areas, He'll open the doors for me and empower me.  If He doesn't, then this may not be the way, but maybe there are other options for me in freelance engineering?

Oh, another suggestion was to get my General Contractor's license.  I haven't a clue on how to do that, but I could study for that and if I had that, it would open more doors for me.  There are options and God wants me to be resourceful, creative and have no fear!!!

Being Aware

It's been awhile since I've written.  Still on my hiatus from trading, but right now there is the need to write.  Currently listening to Norman Hallett's free teleseminar on "The 5 Keys to Disciplined Trading" - really good stuff.  He was talking about psychology and how our neuropathways are built.  He used the words "trading is gambling" and that really struck a raw nerve in me.

I feel this thing rise in me of anger.  Not going to "vent", but just share some things I'm noticing. 

One of the things I'm learning is with regards to being offended.  Have I been consistently successful for the long-term?  No.  As Norman is going through this teleseminar, I can see why.  My mom, more than most people, have reiterated to me how much trading and the stock market is gambling.  What I don't understand is that if that's so, then why do people bet their whole retirement, pension, 401Ks and place them in the stock market?  That makes no sense to me.

How about Vegas?  My mom lives in Vegas and I think periodically she does go to the casinos.  She does do some other types of gambling, and it's fun for her.  I've received a lot of formal education in trading, lots of psychological counseling, but looking back, I see where I got the education was not the right place or that I spent way too much money blowing it on the wrong education.

All the things Norman is talking about, I've had to learn through the school of hard knocks, which has cost me way more than what he charges.  Wow, I could've saved so much time and money going through him.  I'm not getting paid to promote him, rather as I listen to him, he's telling the truth about things.

So, what have I been doing these past 2 months?  Spending time with my kids.  They started school 5 weeks ago and that's a lot of work.  Been also doing a lot of reading on money, spiritual things and it's really hitting me hard.  I'm going to be a much better and different trader when I do come back.  In the meantime, my MLMs aren't working too well, so I will be looking for other ways to bring in money somehow outside of trading.  Pray for me.  It's not what I want to do, but it needs to be done for awhile.  Sucking it up.  It's all good.

Amazon Store