Trading As A Business
Trading in the financial markets, whether it be the Stock Market; the Commodities Market; the Futures Market; the Forex Market; or even the Options Market; is taking big risks on your hard-earned money.
You have to treat trading as a serious business whether you are trading full-time or part-time if you are ever going to succeed and hold on to your profits in the long run.
Yes, you heard me right. You have to plan and manage it like a brick and mortar business.
There is no other way to succeed in trading or speculations if you are not going to give the due respect that Mr. Market deserves. If you don’t respect the Market, the market will not give you the reciprocal respect, in terms of taking money out of the markets and hold on to them.
Once you have this proper mindset, we can move on to other important components that make up your trading business.
The first thing you need to do before you start a business is to have a Business Plan. In this case, it is called a Trading Plan.
Now, this is the place to set your Goals that you want to achieve. Be as specific as possible while being not to easily or impossible to achieve. Set yourself a goal that is challenging to you without it being too big a goal.
Now, with your goal set, you have to break down this goal into smaller components of actions that will lead to achieving your goal eventually.
This is your action plan. Be detail and realistic. If you are working full-time and you can’t always look at the market every minute, don’t put an action that requires 해외선물 you to monitor your trading positions every moment. You get the idea.
OK, you have set your plans, what next?
In order to survive and prosper in the long run trading in the markets, you need to be consistent in your actions in the buying or selling of your market products, stocks as an example.
You will also need a measure of what actions are right and which are mistakes. Believe me, without such a standardized and formalized measure, you will always think all your actions are right, even when you are losing money! That’s the default optimistic human nature in control.
What you need can actually be found in a System. It is normally called a Trading System. A Trading System consists of Setup, Entry, Exit and Money Management strategies.