Learning Plans

Design and use learning plans as a learning tool to help accelerate your study efforts. Find what works for you. In this article we highlight several factors important to creating and managing one’s learning process.

For illustrative purpose, we’ll use Kenny, a new trader, and the steps he created for gaining the most from his learning process.

Note: The following is a sample learning plan compiled from various plans and schedules used by many of our subscribers and past clients and is an example—not a plan to be copied and used as a plan for your trading. Only you can complete your plan because you are unique and have unique values and beliefs, education and learning experiences, as well as unique financial positives and negatives.

So, that being said, let’s take a look at Kenny’s learning plan:

Step 1: He quantified his beliefs and values regarding learning:

I believe ongoing learning is essential to my success . . . So . . . I consistently invest my time, energy, and money in understanding markets and human behavior.

I believe my understanding of my learning is best confirmed by teaching others . . . So . . . I enter into and nurture relationships where I am both a learner and a teacher.

I believe learning is a perpetual process with the results achieved in direct proportion to the fulfillment of my commitment to learn . . . So . . . first, I plan my learning by topic, time, resources, and support. Second, I keep my commitment to my process, and third, I measure my progress by the quality of my performance—not my results.

Step 2: He defined his vision and goals for learning:

My overall vision of myself based on living my learning values is to be a knowledgeable, skilled, consistently profitable trader proficient in effectively dealing with any change in the market or myself. My goals as a ‘learning’ trader:

To be financially independent so I can care for my family.

To help others who are capable to learn and advance.

To help those that are incapable of helping themselves.

Step 3: He understood where he was in relation to his goals:

Age 45, married 20 years with 4 children – ages 10 to 18.

Worked for 15 years as a manager for Macy’s – laid off 3 months ago – received severance pay for 6 months – job search to-date has been unsuccessful.

Financial situation – Has savings of $45,000, home equity of $150,000 (down from $250,000), and a very supportive spouse who is a physician with an income that covers the family’s living expenses and a substantial retirement plan through her clinic.

Traded evenings for 4 years – somewhat successful, took several courses, read many books. Loves trading from several aspects; the freedom to make his own decisions and be responsible for their outcome, the ability to set his own schedule, the potential unlimited upside, the opportunity to be successful and enjoy success based on his own investment of his time, energy, and money.

A wife who understands both the opportunity side and the risk side of being a trader but believes, knowing Kenny and his degree of diligence, commitment, and discipline, that he should pursue trading as a vocation based on his learning plan. And if, later, it is mutually agreed that trading is not either right for their family situation or Kenny as an individual, they can walk away from it, knowing—versus always wondering ‘what if’.

Step 4: He explored a number of options related to becoming a full-time trader:

Continue his course of self-education with periodic courses that appear to potentially be beneficial.

Enroll in a structured investor / trader educational program at a local college.

Find a mentor that aligns with the market(s), timeframe(s), style, and methodology he wants to trade.

Locate a ‘prop’ trading company that offers a trading process that meets his criteria.

Purchase a software program that supports what he has learned and experienced over the past four years and, now that he has time, see if he can design a methodology that works for him.

Find a trading system and determine if and how it can meet his goals and objectives.

Step 5: He decided what learning process best fit him by:

First, doing extensive research and due diligence related to each option as well as other options that he discovered during his research.

Second, talking with others, both traders who were still trading and several who had tried at one time or another but didn’t trade anymore, as to their experiences in making a similar journey.

Third, because of the relationship and respect for his wife’s opinion, he sat down with her and presented the positives and negatives of each option and let her challenge his thinking as to which course of action would most likely fit him best and offer the highest probability of success.

Fourth, based on his research, his due diligence, and his expanded thinking derived from his wife’s questions and brainstorming, he made a decision to retain the services of a mentor to help him discover his ‘right fit’, facilitate the design of his trading plan, support him in the launch of his trading process, and be his performance coach.

Step 6: He designed his learning plan:

The specifics of what I want to learn from or receive guidance from my mentor are:

What are the three highest probability methodologies for trading the S&P contract in the day timeframe?

What, based on my account size, my tolerance for risk, and my commitment to following proven guidelines, are the best principles of risk and money management for my situation?

What are the three best trading software applications available that specifically support my planned methodology? What hardware requirements best provide for the maximization of the software’s features and functionality, replay and simulation for my deliberate practice sessions, and both redundancy and back- up in the event of a technical issue?

What processes and procedures have proven to be effective in gaining the most from my mentor’s services both in the short-term and over the long-term? Pre-trading session work such as market reviews, market analysis, pre-determination of key levels, preparation of scenarios, ‘what if’ exercises, etc..

Schedules (Daily / Weekly / Monthly): Read, study, complete exercises, in preparation for sessions with mentor. Define what needs to be done, schedule times (uninterrupted and free of distractions) devoted to completion of the preparatory work. When complete, review it critically, and submit it to mentor for a thorough critique. Based on the results, address areas of deficiency even if it means a delay on-site sessions.

Jointly, with my mentor, prepare the following for sessions:

A complete time management plan for each session as to the objectives of each session, the preparatory work required before each day’s session, the planned working components of each session, and the post-session’s homework assignments.

An evaluation procedure to measure my understanding of the information presented, the exercises performed, and the areas requiring immediate, additional study so I maximize my investment (the mentor’s fee).

Note: Jointly, with my mentor, develop a post-session plan for my continued reading, study, and skill development including my journaling, recording keeping, and reporting requirements).

Step 7: He developed his support team:

His wife who worked with him to create a trading account balance that would not put pressure on the family and relieve Kenny of worrying about the financial requirements of the household including the children’s educational expenses.

His children who committed to supporting Kenny by keeping noise and distractions to a minimum while they were home during the hours he committed to his trading.

His broker who offered him an extended, complimentary, simulation service to help Kenny work through the process of developing and becoming competent with his methodology.

His mentor who committed to being his coach and support him in his development as a trader by offering candid reviews and critiques on a timely basis plus providing ideas to help Kenny progress in his pursuit of becoming a consistently profitable trader.

Step 8: He Made it Happen.

With most of the factors in place in his learning plan, Kenny had the responsibility of making it happen. Now remember, this was just the learning plan—this was not the development of his trading plan. Developing the trading plan is a completely different exercise in its content but follows basically the same context illustrated in these nine steps.

Step 9: He reviewed and refined his learning process:

First, he set up a weekly schedule for the on-going review of his progress in becoming proficient with his trading methodology.

Second, he kept diligent records including a daily journal, annotated screenshots of every trade he executed, and copies of every report he submitted to his mentor. After the mentor had reviewed the work Kenny submitted, he and Kenny walked through each item to make sure there was mutual understanding, as well as options to consider for improving both the learning process and Kenny’s trading process.

Third, at the end of each month he sat down with his wife and older children and told them what he had learned that month, how it had helped him or how it didn’t, his progress in becoming more proficient, and his plans for the next month. He also did the same thing with his mentor and broker since they were part of his primary support team.

This entire review and refinement process was part of his responsibility to furthering his learning process and, at the same time, helped him be accountable for his learning journey. And, it kept his primary support team engaged, informed, and anxious to contribute ideas because they truly felt they were an important part of his progress and valuable contributors to his learning process.

In concluding this article, please remember two points:

First, the above nine phases are focused on developing and managing your learning process as a trader – not the development and management of a trading plan. In a future series we will share ideas and processes related to developing and managing your trading plan.

Second, the development and management of your plans and processes is your responsibility because (A) nobody knows you better than you, and (B) nobody cares as much about your money or your future than as you do.

Until next time . . .

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