In the last part of our series on developing a trade plan, we asked you to consider how much you were going to invest. It is time to assess your resources and evaluate not only your financial resources, but your time resources and other resources that you will need to invest wisely.

Financial Resources

As we previously stated your financial resources will play a significant role in determining your overall trade plan. If you have $5,000 to invest your trading plan will be very different from someone who has $50,000 to invest, and your plan should reflect this.

Time Resources

You must consider the time that it is going to take you to implement your trading plan. If you plan to spend only one hour per day monitoring your investments, then your trading plan should reflect this time, whereas if you can devote 3-5 hours per day, you can trade slightly differently.

Clearly if your job takes you to very long and lengthy meetings and you hit a period of high market volatility you run the risk of losing out on beneficial trades (or run the risk of substantial loss) if you are not able to monitor what is going on with your investments.

Other Resources

Do you have subscriptions to financial newspapers, access to a broker who is readily available to discuss various trading ideas, regular access to the internet, regular access to updated stock prices? These important resources can help you plan your next steps, update your trading plan (when necessary) and provide you with an ongoing education into various types of trading.

It is critical if you are going to be doing short term trading that you are constantly abreast of what the changes in the stock market are. If you do not have the time to do this yourself and are depending on a broker to do that for you, then you must have the ability to talk with them on a regular basis.

However, if your trade plan lays out mainly longer term goals, then you should have no problem monitoring your portfolio's progress. However, if you have established a lot of short term trades, you will need to monitor the market activity much more closely and more often.