Hi, Andrea Unger here and today I want to discuss a bit about trading as a business.
You might be willing to trade as a hobby that’s fine, absolutely fine. But If… if for some reason you imagine trading as a source of income and maybe you want to be trading for a living, then definitely you must consider trading as a business.
What does it mean? It means that you have to think about the direction you want to go and to structure every single step in this direction as if you were a company looking for expansion in a market for example.
So what do companies do? A business plan. That is exactly what you have to do, a business plan. You have to look at yourself inside yourself. What kind of trader are you? What kind of trading style should you be looking for and then structure yourself in this direction. You must also imagine what…. all that you need to do so and one of the point is education. You have to invest in education. Companies do invest in education. The same applies to you. If you want to be serious about trading, you must look for a mentor, quality mentor and identify what of his products are okay for you. So look for it and then invest for it.
Another point, a very important point is to structure yourself seriously in terms of software and hardware. Hardware, a good computer of course and possibly you should put everything either on a cloud server or a VPS, things like that where you are safe in case of internet disconnection at home, power supply problem, all these things you know. They do happen, believe me. And software, the software you have to choose software that meets your requirement depending on the way you chose to trade. I mean if you are a discretionary trader or a scalper you need a good platform. A good broker, fast.
If you want to be a mechanical trader or a systematic trader, then you have to imagine a good software to build your models to get signals out. Maybe you trade automatically and these are all the costs of your business. You have to consider them. They might be one shot cost at the beginning, the software, or cost which are repetitively every month: data, market data, real-time data. These are all things you have to pay for and probably you have to pay them on a monthly basis because markets require fees to provide your data. All these things have to be considered and calculated in the cost of your trading business.
Last but not least, and this is the bad part of the costs, you have to consider as costs also the losses. Yes, because there are losses. Many people don’t tell you this but there are losses in trading. We look for medium long term profitable outcome. But during this span, we have some losing trades, it’s normal.
These are all the cost of your business. You have to consider them as costs. Don’t cheat on this. It’s so important. When a trade is a loser and it’s supposed to be stopped out, stop it. Don’t keep it open pretending that if it’s open you have not lost money yet. No. It’s just a way to cheat. You have to stop it. That’s the cost of your business and in any business there are costs. So if you really want to become a professional and serious trader, consider all the possible costs and don’t forget to include the losses which are the cost of this type of business. Stay tuned to get more info on this and good luck.