Every trader wants to make a profit.
But while everyone cares about P/L, not everyone treats deals like business.
Some do it for extra income, others like playing in the market as a hobby, and some make it a part-time or full-time business.
Here are some signs that you are growing your trading business.
you have a mission vision statement
You are more likely to succeed if you know why you are doing what you are doing.
A mission vision statement establishes what you are aiming for and how you see the future of your business. It also helps guide future goals and execution.
you have a business plan
What is a business without a plan? No, “buy bitcoin and hold it until the moon” is not a business plan.
Your plan should answer certain questions, such as:
- What assets do you trade?
- What (profitable) strategy will you use?
- What is the transaction identification, execution and journaling process?
- What are your key performance indicators (KPIs)?
- What are your benchmarks for short-term and long-term success?
- How much time and capital do you allocate before re-evaluating your business?
A business plan helps you fine-tune your goals, know when to make necessary changes, and focus on making the most efficient use of your time and resources.
your business is properly funded
There are benefits to risking only money you can afford to lose, but there is also the risk of running out of capital.
Properly financed can help you blow through periods of bad business (bad deals) and increase your chances of surviving long enough to experience periods of good business (good deals).
For that matter, you should also have a separate trading fund. Not only does it make profit and loss tracking easier, it also protects you and your family’s vacation funds.
you have the advantage
Having something that sets you apart from your “competitors” increases your chances of success.
Whether it’s the assets you specialize in, a solid discipline, or a set of trading playbooks, you need an edge to generate consistent profits on a variety of trading conditions.
you follow a strict routine
If you’re serious about growing your business, you need to be there when opportunities present themselves.
This means showing up daily to maintain a schedule of research, pre-deal preparation, deal coordination, and journaling.
you are careful about your expenses
You can’t optimize your operations if you don’t know where your expenses are coming from.
Besides assets such as monitors and paid subscriptions, you should also know about spreads, brokerage fees, interest rate differentials, margin requirements and tax terms.
Opportunity cost (getting ideas you didn’t adopt because your capital was invested elsewhere), psychological cost (loss of confidence in a losing deal), and health cost (knocking you out of making the best decisions) other expenses such as forms) should also be considered when improving processes.
perceives loss as a cost of doing business
Professional traders treat losses as a necessary part of their business, just as merchants tolerate non-payment of customers, damage to goods, and theft.
The key is to keep trading losses small while maximizing profits and opportunities.
working to improve the business
As a business owner, protecting your capital is not enough. We also need to grow our capital.
Why profit from one trading strategy when you can profit from two or three trading strategies?
You can start by paying attention to your trading statistics, learning from other traders, and investing time, effort and money in developing your skills and strategies for opportunities for improvement.
That’s it for my list! How many times have you said “That’s me!”? To? What else do you do in your trading business that isn’t on your list?