Trade as a business
Trade in financial markets, whether it is the stock market; commodity market; futures market; Forex market; or even market options; Taking a big risk of your hard-earned money.
You must treat trade as a serious business whether you are trading full time or part time if you will succeed and hold on to your profits in the long run.
Yes, you hear me right. You must plan and manage it like a brick and mortar business.
There is no other way to succeed in trading or speculation if you won’t give respect that Mr. Decent market. If you do not respect the market, the market will not give you a reciprocal respect, in terms of taking money from the market and holding on to them.
After you have this right mindset, we can switch to other important components that make up your trading business.
The first thing you need to do before starting a business is to have a business plan. In this case, this is called a trade plan.
Now, this is the place to set your goals that you want to achieve. SESPESIFICS maybe while not easy or impossible to achieve. Set yourself a challenging goal for you without being too big.
Now, with your goal set, you must break this goal into a smaller component of the action that will cause your goals in the end.
This is your action plan. Become detailed and realistic. If you work full time and you can’t always see the market every minute, don’t put an action that requires you to monitor your trading position at any time. You get the idea.
Ok, you have set your plan, what’s next?
To survive and prosper in long-term trading on the market, you must be consistent in your actions in your market purchase or sale, shares for example.
You will also need what action is correct and which is a mistake. Believe me, without standard and formal sizes, you will always think all your actions are right, even when you lose money! That is human nature that is optimistic by default.
All you need can actually be found in a system. Usually called the trading system. The trading system consists of setting, entry, exiting and money management strategies.
The setting is a set of patterns, ratios or definitive conditions that you are looking for while trading.
An entry is the actual point where you have to “enter” to the market, both “buy” or “short selling”.
Exit is as a label implies, actually the point or condition when you have to turn off / close your open trade position. It can be a way out of profit or exit cutting losses.
Money management or more specifically called position size strategies define and answer the question “how big” to buy or sell in entries or exit. Contrary to general beliefs, this is actually the most important component of the trading system. It can determine whether you can make it your trade career.
The importance of the trade system cannot be emphasized more. You need a trading system to do consistently according to market changes and guidelines to tell you when your actions are correct and when you are at a big risk and danger.
There are two ways you can have a trading system. You can design it yourself if you have a large amount of knowledge in the field of trading needed in designing your own trading system that requires great efforts and a long and boring total commitment to your time, or you can order a professional trading system like that it has been proven to have The rate of victory was 71.9%, as tested by a third-known third party vendor and my own experience using it.
Let’s see what is needed in designing such a trading system mentioned above.