Every once in a while it's probably not a bad idea to take inventory of our trading related skills. As I began to do so for myself I also recalled inventories with which various coaching students came to me and inventories of students at seminars. I am convinced that what we choose as our focus or focuses in trading can make or break us. There are many ways to succeed in trading and certainly many more ways to fail. I suspect that the way we prioritize the skills in our own inventory ultimately is what makes the difference.

When I write about a trading skills inventory, I mean those skills that we possess that might be included in the "how" of our trading. Last week, for example, I wrote about a specific type of order, the limit order, as an illustration of one part of the trader's inventory. Though not necessarily a complete list and definitely in no particular order, the following might be included in a trader's personal skills inventory:

a. knowledge of and ability to use various orders
b. technical knowledge and abilities
c. understanding and using fundamentals
d. utilizing reward to risk potential
e. finding candidates to trade
f. entry decisions and strategies
g. exit strategy
h. devotion to continuing education
i. ability to discipline one's trading
j. money management
k. having a plan in general and for each trade
l. knowledge of and ability to use various strategies

You may add other skills in your own trading inventory. Whatever the case, may I suggest you take a few moments and look over the list above. Perhaps it might be beneficial to see which of those skills you possess and how you utilize them in your trading. Once you have considered that, it might be helpful for you to prioritize them in the order you perceive their importance to successful trading. Once that list is completed, compare it to a list arranged in the order you have prioritized these skills in your own actual trading.

Often, the two lists, the one as you see the best prioritization for success and the other the prioritization you actually have been using may differ significantly. A change in those priorities could well make a difference in your trading.

Though subscribers who have read either of my books, "Smart Investors Money Machine" or "Trade Your Way to Wealth," may already have an inkling of the order of my list of priorities, I'll discuss them a bit in next weekend's article.

Good Trading!
Bill Kraft

February 6, 2010

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