Get a different perspective by following these six principles.
Very few traders treat trading like the serious business it is. Most approach it like a hobby. While trading is a lot of fun, it’s still a business, and if you don’t frame it — that is, approach it with the attitude that it’s a business — you will not do well in the long run. Here’s a different twist to help you see your trading in a different light.
- Think of it this way: As a trader, you have a “trading company.” It just so happens that you are the head trader. As with any other job, you should have a job description (that is, your trading plan). You should know exactly what your daily duties are as the head trader. You should have your daily quota or trading goal already set, just as with other businesses. And you should have rules and guidelines for your business so you know how to handle any situation that comes your way during the trading day.
- You have shareholders — they are your spouse, your kids, your business partner, and so on. They are expecting a positive return on their investment. Yes, they too have invested time and money in your business, and as the “CEO” of your trading company, you have a fiduciary responsibility to trade according to company policy and to turn a profit. All businesses are expected to turn a profit, and your trading company is no different.