A trader\'s money management system

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c03 JWBK182-McDowell April 25, 2008 15:41 Printer: Yet to come

28 A TRADER’S MONEY MANAGEMENT SYSTEM

 Ability to stay out of the market


 Lack of anxiety


 Calm under pressure


 No anger


 Even-keeled emotions


 Healthy self-esteem


 Desire to improve skills


 Enjoyment of the process


 Ability to be flexible


 Generally optimistic


 Realistic risk–reward objectives

Current Weaknesses


 Lack of computer skills


 No current risk plan in place


 No tested trading system in place


 Inability to identify changing market cycles


 Lack of discipline


 Excessive anger


 Excessive joy


 Excessive anxiety


 Excessive greed


 Excessive fear


 Inability to pull the trigger


 Compulsive tendencies


 Low self-esteem


 Paralysis under pressure


 Overtrading


 Performance denial


 Apathy


 Lack of flexibility


 Generally pessimistic


 Risk adverse


 Risk (and thrill) addicted


 Unrealistic risk–reward objectives

AFTER YOU TAKE INVENTORY

Once you’ve taken inventory of your current standing, then you want to

decide how to eliminate some of the items on the weakness list and add

some new items to the strengths list.