Forex Trading is A Business
The Huge Benefits of the right approach to Trading; it is a business
Without a doubt, trading is an awesome business; however, it is only so when one appreciates it as an real business venture. Majority of traders get to this point only after enduring several financial misfortunes. Nonetheless, when they finally come to this realization, they get immensely rewarded.
Most traders miss the mark right at the start of their careers in trading. Their view of trading is that of it just being a simple or quick means of making money, instead of as a legitimate business. Because of this error, they pay dearly financially and personally.
Try to recall the first time you heard about trading; it appeared somewhat straightforward, and it looked to have significant potential. Many great benefits were on offer, some of which were low barriers to entry, no employees, and considerably low start-up capital. However, before long, I’m sure that it become clear that it was not as simple as it had first seemed. There were so many decisions to be made, with a myriad of possibilities.
Most times, because trading is portrayed as ‘easy money’ rather than as a credible business, new traders tend to just dive into live trading believing that once they start earning some money with it, all other things will fall into place. They tend not to consider all that it takes to thrive consistently over time.
When trading is embraced as the business it is, several truths are realized that make the journey to success in trading considerably easier. One also recognizes several important benefits and advantages that would have easily been passed over. Firstly, when you fully engage yourself mentally, and embrace trading as the business it is, you will find that it will appear and feel entirely different. A great number of traders see trading as their identity, and even as their future. However, when the business is yours, one should stay detached to a certain extent because it remains separated from you; it is a business in which you take part, while preserving your whole identity. Your convictions about it will remain strong, but some separation and detachment is necessary.
Secondly, if you do not handle your trading with the mindset of an entrepreneur, all your trading activities only get partially organized. For those whose perspective of trading is that of ‘quick money’, you will find that their trading is only structured and organized well when they are starting. It is important for trading to be viewed as a venture that must be systematically built. In such an approach, a great deal of forward thinking and detail is required. As a result, proper perspective and realism is brought into the process, which would otherwise have been missing.
Another advantage is of patience and structure. When trading is embraced as a legitimate business, realistic expectations are made from the start. It is well understood that the business cannot be made profitable overnight, thus manageable goals are set. With ‘quick money’ schemes, frustrations and disappointments are guaranteed because impractical expectations.
Taking trading as a business also helps you evade opportunity cost. For every month a trader fails to make a profit because of disorganized trading; it symbolizes an opportunity cost because of wasted time and tied up capital that would have been useful elsewhere. It can be said that the utmost benefit of treating trading as a business is that time can be compressed to profitability. The right approach brings about proper planning, and thorough consideration of all sensitive matters. The lack of a good business plan is the one thing that most failed businesses and failed traders share in common.
If you approach any angel investor, bank, or venture capitalist without a business plan, they will send you away without any money or any consideration of what you had to offer. This is because decades of experience in business have taught them that one’s chances of succeeding without a well thought-out business plan are next to nil. In addition, they understand well that even if you do succeed in time, it will take you too long to get there; thus, they will have to wait too long to get back their investment.
Another major way in which a business approach with a good business plan is beneficial is that, it will keep you focused and help you to avoid many deviations and wastes of resources and time. A great many traders have tested numerous different trading systems and markets seeking a financial breakthrough, and it has ended up costing them immensely.