Most people, if presented with the following scenario, would reply, “sign me up!” What is this scenario? Imagine…
- Waking up… brushing your teeth… grabbing some breakfast… (notice, I did not mention anything about getting dressed)
- Walking to your computer… turning it out… clicking a few buttons…
- BOOOM! You are ‘at’ work (and still in your underwear if you choose)
To me, this sounds like a very ideal situation and I think many would agree. No boss, no office drama, no peer reviews, etc.
This is the life of a full-time stock trader. The majority of people in the stock market I come across are striving to accomplish this goal. They want to quit their job and trade for a living. A big goal for sure… and goal’s are needed for success; however, the one thing I see over and over again, is people don’t “act” like they want to make this goal a reality.
What is Your ‘True’ Goal as a Stock Trader?
So what is your sincere goal? If you truly want to become a full-time stock trader, then this article is designed for you. If you are someone who just enjoys stocks but loves your day job, then I’ll be honest, you can stop reading right now as this does not really pertain to you.
From my experience in talking with people through the blog, not many “love their day job” and they want to start trading stocks full time. What I have discovered is that despite them genuinely wanting to to do this, they simply don’t take it very serious.
What do I mean by this? They treat trading stocks as a hobby… not as a business. If you want to trade stocks for a living, get this principle into your head right now:
Trading stocks is the same thing as owning a business. The only difference is “you” are the actual business.
In other words, the minute your goal honestly becomes “I want to trade stocks full time”, you instantly become a business owner.
I Am a Stock Trader Business Owner – Now What?
Maybe you’ve owned a business before, maybe you have not. It doesn’t really matter, because you own a business now!
The first rule that comes with this is the old saying (yet extremely true): it takes money to make money.
If you are now thinking, Thanks Captain Obvious, I know I have to use money as a trader to make money… that is what my portfolio is for! then you are missing the entire point.
The money you are using to trade with “is” your business, but that is entirely different than the money you use to build and grow your business.
The Butterfly Business
For example, if a person decides they want to sell butterflies as a business, there are a few things they will need to do before they can sell them effectively and consistently…
- Actually learn about butterflies.
- Build some infrastructure so the butterflies have a place to live.
- Find an area that is favorable for butterflies to flourish.
What if I told you the person skipped over all these steps, and instead took their money and used it to travel to Butterfly Conferences all over the world in order to try and sell the butterflies (since that technically is where the profits will come from).
Hopefully you are noticing a few problems with this business model…
- They know very little about butterflies other than the basics.
- They have no infrastructure, so even if they were able to sell some, they don’t even have any butterflies.
I am hoping that we can all agree that this is not treating things as a business, but more-so as a hobby where the person is skipping over crucial elements and jumping straight to the “fun stuff” (traveling, meeting new people, etc.).
I don’t know about you, but I can totally relate to this situation. I fell in love with the stock market very quickly and made it my goal to “trade stocks full time”…. however, I only wanted to jump straight to the “fun stuff”… ya know? The actual trading part of the business.
My problem was I had no idea I had all of a sudden become a business owner. To make a long story short, because I immediately went directly into the “fun stuff”, I was up a nice amount of money, but then eventually gave it all back to the market, plus some, and ended up taking an overall loss.
Putting my money in harm’s way without having any education or the proper tools was literally one of the dumbest things I could have done…. and people do it all the time.
Stock Trader Business Building and Operations
There are two primary functions that need to be addressed if your business has any chance at succeeding in the long run.
As a business owner in the stock trading world, do you understand your industry? Do you know how it all works? Do you know the ways that you ‘can’ make it work?
This is not rocket science by any means, and quite frankly it seems super obvious; however, I see it time and time again (and as I’ve already admitted, I was one of the boneheads who also did it) where people get their trading account funded and BAM! they are making trades.
Sure, they will do a bit of reading and internet surfing first to trick themselves into thinking they are “getting educated”, but in reality, they are simply playing a mind game on their psyche (again, I speak from experience).
Case in point, business owner step #1 is to get education. Whether or not you buy my courses for education, that doesn’t matter, what does matter is that you are getting educated.
I place Education before Tools because I don’t care how fancy of a hammer a carpenter has, if they don’t know how to use it, the tool itself is worthless.
Some questions to ask yourself in regards to the tools needed to succeed…
- Is your trading station a computer from 1995 or something more modern?
- While you don’t need a cutting edge of technology computer, you need something that can handle the demands of a trading business.
- Are you trading with Level 2‘s?
- If you are not, you might as well put a blindfold over your eyes.
- Scanners? Chart data? Information data?
- Information is power, and if you are getting delayed data or anything of that nature, you are setting your stock trader business up for bankruptcy.
I am as frugal (aka, a “cheap skate”) as it gets when it comes to money, so I really struggled with this concept when I first began. Mainly with Level 2’s… I saw people referencing them… I had people tell me that I really needed to learn and use them… but ugh… that would cost me money each month… so I went on without them and you guessed it… lost some more money.
Time to Be Honest with Yourself
Where do you stand with your attitude towards stock trading?
Do not lie to yourself and try and convince yourself that you have been treating it like a business if you have not. The fist step to success is admitting that you have been in stock trading “hobby mode” instead of “business mode”.
Where do you stand with your strategy?
Are you throwing darts at a board (remember, be honest with yourself) or do you have a strategy that gives you a logical reason to make a trade?
I personally struggle with emotions, so the solution to this problem was learning how to read charts with technical analysis. I found this was a great way to eliminate emotions from my decision making process.
Where do you stand with your toolbox?
Do you have any idea what I mean when I say “Level 2”, and “scanner”? Do your business a favor and give it some infrastructure.
I Would Love to Help Build Your Business
I am very confident my educational courses found HERE can help you build your business. I offer courses on psychology, charting and managing risk with Level 2.
If you already are treating your stock trading like a serious business, then well done! You are on the track to long term success. If you are someone who has just realized you have been treating stock trading like a hobby and not as a business, then I have good news for you!
You now understand that you are a business owner. With this new found knowledge, take the steps you need to turn you former hobby into a well oiled business machine.