Treat Trading Like A Business: Do These 4 Things On A Regular Basis

[fxfarmerashik]

I was working through a software I bought a few days earlier in Hong Kong one morning. This program's material was highly fascinating and challenged my trading views.

However, what truly resonated with me was this: "Trading must be conducted like a business."

I couldn't quite get it after reading those few words for the first time. What does a business have to do with a lone trader generating money in a coffee shop or at home? So, after some thought, I came up with a solution. 

It everything made sense. The secret to trading success is to approach trading as if it were a business.

But wait...

What does this imply? Does this imply that you must immediately obtain an office space and recruit four employees?

Nope. That won't be necessary (relax!).

However, it does imply that you must implement what you perceive in the business world.

A business has certain structure and processes for how things are done. In trading, you are running a business from the minute you open your computer until the moment you close it.

Here are four things I learnt while working for large corporations. These will enable you to approach trading like a business:

1) Create A Trading Strategy

Many individuals in business emphasize the importance of having a business strategy. 

The major goal is to obtain a better understanding of what the company will accomplish and how it will compete with competitors. Trading is no different, and a well-thought-out strategy will go a long way.

If you are serious about trading but have never taken the time to develop a trading strategy, you now have a new chore on your to-do list.

A well-thought-out trading strategy is what distinguishes amateurs from professionals. It is also what changed my total trading return.
It is also what changed my total trading return.

When my trading was not profitable, I became serious and devised a trading strategy. It was the most satisfying work I'd ever done.

When my trading was not profitable, I became serious and devised a trading strategy. It was the most satisfying work I'd ever done.

Check out my Guide to the Ultimate Trading Strategy for more information on how to develop a solid trading plan. Remember that a trading plan does not have to be extremely detailed (or boring & using useless words).

This strategy, on the other hand, will be your primary trading document.

It will have all of the information you need to operate at your peak from the time you wake up until the end of your trading day.

Congratulations if you already have Forex trend trading strategies on your sleeves! You've taken the first step toward treating trading like a business!

2) Hold Regular Meetings

I used to work for an aerospace firm. We held what we called a morning meeting every morning at 8:00 a.m. It provided a means for us to communicate with others about what was going on. We might start the day on a bright tone by laughing a little and talking about our previous evening.

We might start the day on a bright tone by laughing a little and talking about our previous evening.

We've even received advice from others!

Similarly, as a trader, you must establish a precise time before beginning your trading day to be motivated and enter in a positive frame of mind. This is an important step, especially if you have traded when you don't necessarily feel on top.

For example, I used to trade shortly after I got home from work. I was working full-time and would rush to my trading desk as soon as I walked in the door.

But I immediately recognized that this routine wasn't ideal. I might occasionally have difficulty focusing on a chart or make mistakes when initiating a transaction. I remedied the problem by going for a little stroll outside right before trading.

I addressed this problem with ONE SIMPLE THING... a little stroll outside before trading. It gave me the opportunity to clear my thoughts and redirect my concentration on something else.

This is why, in trading, you must organize frequent times or meetings with yourself, like as going for a stroll in nature or doing something else that will put you in a good concentrated attitude.

You may hold the meeting alone, unlike at the office. Isn't it fantastic? This is referred to as reviewing.

The purpose of the meetings is to prepare for trading. You may also set up a meeting to go over your deals (but more on that later...).

3) Make Use of Thorough Planning

Some companies are known for their careful planning process. During this process, they consider how things will be carried out in the future. That is fantastic as long as the strategy has an end goal.

It is critical in trading that you plan your trading strategy ahead of time. This entails studying, developing, and testing your approach.

To learn more about this technique, see The 3-Step Process To Planning Your Trading Strategy. It discusses how skilled traders plan ahead of time before executing a new trading technique in order to earn immediately.

If you skip a phase, you could be shocked at how difficult it will be to implement your approach profitably.

However, one point must be made. You must use extreme caution. You set yourself up for failure if you don't plan ahead of time. If you plan too much, you will never attain your goal. Make it a habit in trading and in your life to only plan for a specific time period in advance.

4) Conduct Periodic Reviews

Consider yearly performance reviews at work, when employee accomplishments and corporate progress are discussed. This is how firms figure out how to improve for the coming year.

For a trader, reviewing entails going over previous deals and making sense of what is written in his trading diary. You'd be surprised at what a trade notebook may disclose.

Following your journal review, you may fine-tune your plan to make it even better. I propose that traders reread their journals at least once a month, preferably once a week, just to get a sense of what has happened in the past few weeks.

"What is measured gets improved," as my boss often said. In other words, keeping and evaluating a proper trading record is the second element to trading success.

While reviewing your trade log, consider the following questions:

• What did I accomplish this week?
• What did I accomplish this week?
• How did I fare in comparison to the previous week/month?
• What can I do differently next week to achieve even greater results?

Maintain a cheerful mindset as you answer these questions. The idea is not to identify your flaws, but to determine what you can do to become the greatest trader you can be, or to improve in the next week.

How To Treat Trading Like A Business...

Although there are various additional methods to make your trading more like a company, establishing a trading strategy, arranging meetings, preparing properly, and assessing your transactions are all things you can do to advance efficiently.

By incorporating these elements into your trade, you will almost certainly notice benefits in a short amount of time.

Remember that nothing here has to be as formal as commercial correspondence. Frequently, I've seen that corporations are more concerned with the quantity of paperwork than the quality and substance of the content. Try to do the inverse and keep things simple!

If you do anything else in your trade operations that businesses do, please leave a comment below so we can discuss it.