Running a trading business is definitely simpler than most businesses out there. No physical location, no employees, no inventory (besides capital) and the sky is really the limit to growth. Because it’s so easy to start, it’s also easy to get sloppy in managing it leading to an early close. The benefits of treating your trading as a business are many, most importantly, you’ll get better results. Does a CEO of a company look at only sales numbers at the end of the day to measure the success of his/her business? No, lot’s of variables are taken into account to know the health of the business and most importantly, how to increase sales. Unfortunately, most traders only care about profits and losses.
In this post, I’ll go over a couple of important aspects of a trading business so that you can treat your trading like one.
Nowadays creating a robot is no longer limited to financial wizards. It’s quick and easy, but creating a robot that makes money is a completely different story. Just like manual traders who adjust their strategies as the market changes, a trading robot also needs to be adjusted frequently to obtain greater profitability. Some systems like Meta Trader are able to create powerful backtesting reports, while others don’t provide valuable information to discover where and how your robot is losing. In this post, we will be showing some of the countless resources that Trademetria offers to improve the performance of your robots.
As you probably know, Napoleon Hill wrote the classic How to Think and Grow Rich to help anyone become financially rich. The lessons in this book are priceless, timeless and valuable at any point of your life.
This post is an adaptation of the 13 principles or steps talked in the book that can be applied to your trading business anytime regardless of your skill level.
When looking for the holy grail of trading, many people spend thousands of dollars on courses, seminars, strategies, books and of course trading capital trying to become consistently profitable. While some of these products can help, I still think they are not enough for most of us. Why? Because trading is a mental game and to teach one’s mind, you need three important components:
Once in a while, a trader will have to deal with a big loss. It’s part of the business and a good trader knows how to manage this situation emotionally and financially. In this post, I share a few tips I use to deal with this issue.
Regardless of your level as a trader, I always believe that good record keeping either through a trading journal software or trading spreadsheet is required for anyone that wants to become successful in trading. These tools help you really understand what goes on with your trading performance from a statistical point of view removing all emotions, judgements and ambiguity from your analysis.
I started trading back in 2001 when my college buddy recommended to buy INFA. I bought 200 shares at $14 and held it for two years selling it for $8. Thanks for the tip buddy! During the next few years, I wasted a lot of time and money trying to learn to trade by myself. All and all, I lost around $5K after “playing” for about 3 years before work. I took some time off and decided to give trading another chance, but this time a real chance. I started trading in a prop firm where I had all the necessary tools to succeed. Under this new environment, I had only 4 down months out of 48 during my trading career. Most importantly, I only lost about $1500 to reach profitability. Pretty big difference from when I tried to learn by myself.
An effective and well organized desk is essential for forex trading success. With a volatile forex market, it is beneficial to have a reliable strategy as well as an efficient trading environment. By creating an optimized space, you can promote better focus and performance especially during executions.
I am living proof that training and mentorship are two of the most important pillars to becoming a profitable trader. When I tried to learn by myself back in 2001, I lost $10k and 3 years trying. When I joined a prop firm that offered training, mentorship, top tools and traders to talk to, I had 44 profitable months in 48. Big difference.
Mistakes are part of life, but if we don’t acknowledge that we make them, we are making another mistake. Like a race car engineer that needs to constantly learn from past mistakes to optimize car performance, you also need to constanly be aware of your past mistakes in order to adjust your trading strategies and profit from them.