Wednesday, January 2, 2008

January 2008 Goals and Rules

Well, I spent last night setting some goals and rules down for January. I could talk about how 2007 went for me, but lets just say that I made a very large initial investment in becoming a day trader the last two months of 2007, and leave it at that. The good news is that I am slowly seeing some of that ROI.

Anyway, lets start with the Goals for January. I have set three levels of goals for January. We'll see how it works out, and go from there.

Goal 1: Realized gains = monthly withdrawal.

I have a set amount of money that I need to withdraw from my trading account each month for my share of the household contributions. Goal one is to achieve realized gains equal to that amount. Since I purchased a large amount of HTE stock during the latest dip, 1/2 of that goal is covered through my monthly HTE dividend, so this is very attainable.

Goal 2: Realized gains = monthly withdrawal plus 10% of account balance as of Dec. 31.

This goal is a little more challenging, but I feel it is attainable if I stick to the rules I will outline further down this post.

Goal 3: Realized gains = $500.00 per trading day.

There are 21 trading days in January. January 1 and 21 the market is closed. This is my most challenging goal. I have had days that I have made much more than this trading options, and of course days when I've lost this much or more... For this goal, I break it down into weeks.

1/2-1/4 - 1500.00
1/7-1/11 - 2500.00
1/14 - 1/18 2500.00
1/22-1/25 2000.00 (Market closed the 18th)
1/28-1/31 2000.00 (31st is a Thursday)

Since this is already a very aggressive goal, I have decided that once I meet a weeks goal, I will take the rest of the week off. Each week will be looked at independent of the preceding weeks of the month. In other words, If I do not make my goal of $1500.00 this week, that does not mean I have to make up the difference next week. If I make $2,500 by say Wednesday the following week, I still take the rest of the week off.

Now for the rules...

1. No option purchases before 7 am.
2. Close out all January option plays by Thursday, 1/10/08.
3. Limit the number of option plays made on expiration week (1/11-1/18)
4. Any week that goal three is realized, stop trading for the rest of the week.
5. Update spreadsheets daily.
6. Update blog weekly at a minimum.
7. Transfer 10% of realized gains over 1500 to my IRA account.

Dow was down 220 points today. Oil over $100.00 per barrel for the first time in history. My Stock Traders Almanac says tomorrow should be a bull day. I hope so!

Always perform your own due diligence before making any investment.

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