The Index Card
(How to grow a small account)
Ever have a few trades on and randomly sell X, yet holding Y, and now you’re watching Z with no plan? Maybe you've never traded before and you’re still confused as to what the fuck an index card has to do with investing and trading. Well, just like yellow lines on the road keep us in the lane, or rules in a sport keep the games fair, the simple use of index cards can be very beneficial. With investing you are more than likely on your own to click buttons as you please for as long as you can afford. By setting goals, you help to keep yourself on the road. Call me old fashioned, but I like to actually use a pen and paper. Crazy, right?
Writing stimulates thought. When you put your plan or goals on paper, it somehow feels more real than when it is just in your mind. You can easily share it with a friend, and sometimes a thought running through your mind sounds great! Then once you write it out, you realize how stupid it sounds. There is nothing more expensive to a trader than trying to make something unrealistic happen. There are plenty of studies on human psychology that back up this claim.
No gains without pain
One of the most startling statistics came from a study done by a few Harvard MBAs. This 30 year study measured the income difference in those who made annual business plans versus those who did not. The study found that those who put together business plans each year out-earned their non-planning peers by over 90% in their career.
Index Card = $ goal
If you set a goal, it should meet two conditions:
- It matters
- You can influence the outcome
Example: $1,000 profit goal by end of the month, which is locked in profits, meaning that you sold the position and realized the gain. Each month you should set a goal to make a certain amount, for example, your goal is to make $1,000 profit. You put on a position and a week later you sell it for $100 profit. On the index card you add $100. Then a week later you put on another trade and make $63. Add the $63 and now you’re at $163, so on and so forth. If you want to make it fun, you can tie the goal to a reward. There was a goal I set to buy my Aston, a goal to buy an AR15, goals to go on trips, buy a new Rolex etc. Could I have still bought all those things or had those experiences? Of course, however setting the goal and exceeding them made all those things that much more enjoyable and memorable.
Big winning streak start with tiny wins (snowball effect)
There are a few things that setting goals, writing them down, and looking at them daily does to people who do them consistently. Eventually you start to move the needle in that direction. Month 1 say the goal is $1,000, by Month 4 it might be $4,000 then end of year might be a $10,000 goal. This also forces you to stay consistent and make money. As you continue with the lessons, you will learn that by focusing on the percentages you can also continue to grow your account.
Do you have balls?
Post a picture in the Group Chat of your index card or of the way you will be tracking your gains.
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