Don’t have a clue? Plan your actions with constraints!
But how, since you don’t know a thing about investing?
List your concerns
When starting any activity where the future is uncertain and you don’t have a clue about it, there will be huge questions like these. The first thing you need to do is to list down all the things that might stop you from getting there, like so:
you don’t know the first thing about trading;
you don’t have a trading account (how much does it take to open one?)
you don’t know whether you have enough money to make a margin trading account work;
you don’t know how much time you can allocate to this activity;
you don’t know if you can handle a huge drop in your funds
We stopped at five, but obviously you need to carry on until you have completely exhausted your concerns.
Turn your concerns into constraints
Reading all these concerns tends to put a dampener on your idea and may cause you to give up on it before you even took the first step. That is not what you should do. Instead, turn your negative concerns into positive constraints. You do this by opening with the words “Provided that I (or we) can…”
Don’t know the first thing about trading? Provided that I can…learn about trading within the next two months.
Don’t have a trading account? Provided that I can open a trading account.
Don’t know whether you have enough money to make the margin trading work? Provided that I can…secure enough money to make the margin trading work.
So, ultimately, the constraints are:
Provided that I can learn to trade within the next two months
Provided that I can open a trading account
Provided that I can secure enough money to make margin trading work
Provided that I can allocate enough time to do margin trading
Provided that I can limit my trading losses
Notice how we did it. We simply took the concern and turned it on its head. We did not embellish it with options (e.g. provided that I can find a broker who will advise me on how to open the trading account)
Seek information
What the constraints do for us now is to open up avenues to seek information. If you need to learn to trade, you’d probably have to attend investment classes, or read investment books, or at least go online and check out certain trading websites. You might also have to formulate your own hypotheses and test these through paper trading – trading without money.
You would also go around and talk to brokers and see who would best suit your trading experience and style. They would need to know what your trading goals are and your level of experience.
You should then learn about stop losses, trading limits and margin calls. These are important information that you should seek and understand to meet your constraints.
Plan of action
Once you have articulated all the information that you have to seek from your constraints, map them out in a proper order, bearing in mind that some activities can be done concurrently and others sequentially. You might realize that you don’t have enough money to start a trading account, and so will need to save up first. You might also realize that it takes 2 weeks to get your trading account approved, so you might have to start that earlier to align your intent. Whatever the case, when you line them up, you can see the total time, and the concurrent activities that you need to take to move you from where you are, to where you want to be.
Primacy of intent
If we’ve said it once, we’ve said it a thousand times, that your intent will drive your actions. Hence, what you need to do, your plan of action, needs to be aligned with your intent. If your intent is to get rich quick, then you must start the activities yesterday! But if your intent is to do things safely, then you might need to spend more time learning the intricacies of trading and identify the best possible way there. Ultimately, that will be driven by your constraints.
So the next time you have no clue how to proceed on an intent,
start by listing out all your concerns,
turn the concerns into constraints, using the words “Provided that I/we can…”
identify the information that you need based on your constraints,
formulate a plan of action from your information
Let me help you
Simply drop me an email at iandyason@aitrainingconsulting.com and I will help you identify your constraints!
