Your investment horizon is less than five years and you are relying on some or all
of the dollars your investing to pay for your expenses during retirement.
Almost invariably, investors who are investing in equities should have a long term investment horizon for that portion that is allocated, OR if their horizon is short (less than three years), they are investing dollars that if lost completely would not impact their living standard. Answering the "should I" and "how much" questions is critical before you can move to the next step. By remaining as impartial as possible, the consistent trader can withdraw any internal feelings or bias and remain open to all of the possibilities at hand. It is vital to remove any bias from their analysis and go with what the market itself is showing them. This way, we can look for only the lowest risk and highest reward trades and opportunities available, giving us a long-term edge in our trading practices.