The Forum is an important feature of The Disciplined Trader Training & Support Program. It is the place where our students can share training experiences with others and ask questions to our Expert Advisers. By limiting discussions to “all things trading discipline”, we can help our students stay focused on getting results.

In this section of the newsletter we’ll pull one student’s pertinent question from the forum and give you our expert’s response, so YOU can benefit from what our students are learning.

We are proud to announce that this week’s Expert is Paul King, an expert on “Risk/Money Management.”

Any experienced trader knows the value of “staying in the game”… meaning avoiding “blowout trades” and trades that result in unexpected losses due to lack of solid risk management and/or money management.

KNOWING that you have solid risk/money management techniques in place as part of your trading plan results in a much easier path to being The Disciplined Trader… let alone watching your account grow rather than continue to experience “boom and bust”.

Paul King is owner, head trader, trading coach, and financial consultant at PMKing Trading LLC.

Paul’s background is in Information Systems, but he moved from technology to the business-side as a consultant to Wall Street companies.  His last real job (some time ago) was as a business analyst at a leading Electronic Communications network (ECN) in Times Square, Manhattan, NY.  Paul is passionate about trading and helping traders improve their performance through his international mentoring program.  Paul has trained clients all over the world including USA, Canada, South America, and Australia.  Paul has written a book about what he has learned developing PMKing Trading called “The Complete Guide to Building a Successful Trading Business”.

As well as writing articles, mini-eBooks about trading and articles published in Futures Magazine, Paul is very interested in personal finance and helping his clients (both globally and locally in Vermont) become wealthier (i.e. closer to financial freedom by reducing fixed expenses and increasing passive income).

Paul enjoys poker, wine and beer (but not the night before a trading day!), vegetarian cooking, chess, backgammon, and organic gardening.

Paul’s philosophy on trading and life in general is summed up by the old Chinese proverb “Those who say a thing is impossible should not interrupt the people doing it”.

Paul does not like to be called a Guru or and Expert.  He’s a no-excuse trader whose passionate about helping other traders experience the success that he has had.

We’re lucky to have him as part of our team of forum administrators… I’m sure you’ll agree.

Now learn from our student’s question…

The Question:

Hi Paul,

Would you give any practical suggestions of how to balance time/effort commitment to “regular” stream of income ( in my case full-time day job) and to learning of trading, system development and self discovery? How to avoid or at least minimize the effect of “catch 22″?

Thank you,

Andrey

The Response:

Trading is like any other expert profession – it requires directed study, research and development, and significant practice and real-life experience to become proficient.  In fact, a common rule of thumb to become “expert” in anything is that it takes 10,000 hours (which would take about 5 years at a full-time 2000 hours per year on average assuming you have a mentor to guide you).  The only way to significantly reduce this time is by finding someone who can help you climb the steep learning curve more rapidly, and also help you avoid spending countless hours on futile efforts.  Knowing what doesn’t work can be very valuable in its own right.

In terms of how many hours you can dedicate to trading versus your “real” job, that depends on your overall financial situation and what percentage of your fixed expenses are covered by passive income streams that don’t take any of your time and effort.  For most people, the interest on their checking account balance is the only truly “passive” income they have, so it represents a teeny tiny fraction of a percentage of their fixed monthly expenses.  My advice would be to have a plan to replace x% of your “time for money” income with passive income each year until x gets to 100% – at that point you will be free to spend all the time you wish on trading activities (or anything else for that matter).

Passive income streams do not spontaneously come into existence normally – you have to have a plan to actively work on them and develop them.  This is not a thing that comes naturally to most people because they’ve generally been conditioned to become “time for money” employees since the day they were born.

One question you could ask yourself is “Why is all my income time-for-money and none of it is scalable, passive, recurring, or repeating?”  If the answer is “because that’s what I’ve chosen to do”, then all you need to do is make different choices to change things.

Hope this helps

Paul

Did Paul’s response help you?  What do you think of this post?  Just hit the comment link to share your thoughts!