How To Start Trading: Trading As A Business
Don’t you think it’s time traditional buy-and-hold was outperformed by a better-functioning investing? Definitely so. Trading does exactly that and more. Instead of seeking profits from long-term uptrends in the markets, trading is focused on short-term price moves to profit – this goes for both rising and falling markets.
In fact, trading is so important that it’s vital was approached it as a business. Why? Because it IS a business.
It is vital to approach trading as a business as it, in fact, IS a business.
In fact, the idea of trading for a living is warming up to a lot of people. Not only you get to be your own boss with a flexible schedule but you work from home while at the same time enjoying virtually unlimited income potential.
One of the upsides of this job is that you don’t need any professional/special training or a degree, but a talent and a computer with internet connection. Still, this doesn’t mean no work needs to be done. Don’t let the apparent easiness of trading seduce you into reluctance.
Here are some quick facts about trading you should master:
You can’t eliminate risk in trading
Within the first year, about 90% of day traders fail
There is no guarantee – no trading system wins 100% of the time
No matter how successful you are, you will always have losing trades
If you are starting out with a small trading account, it will take a long time to get rich. You need money to make money, simple as that
Most traders do not become “filthy rich” but rather earn and live on a comfortable income
You need to be smart about the way you are starting your trading business. The fact there is an ease of doing business that surrounds trading doesn’t necessarily imply you’ll instantly become successful. In fact, the failures that happen within the estimated 90% of traders, happen precisely because traders start trading without having developed any type of logical business or trading plan.
Trading requires constant research, devotion, evaluation and discipline. No matter how many hours per week you work, there are no guarantees in the trading business. Loosing money is bound to happen unless you are properly organized. Before you take on this type of business activity, you should make sure you have both the personality and financial means.
Types of Import/Export Businesses are:
Export Management Company (EMC)
An EMC’s duty is to sell a domestic company’s product overseas. This domestic company doesn’t know how to do it itself or doesn’t want to know how. The EMC does it all–hiring representatives, dealers and distributors; handling marketing and promotions as well as advertising; overseeing marking and packaging; arranging shipping; and sometimes arranging financing.
EMCs are paid by salary, commission or retainer plus commission.
Export Trading Company (ETC)
Different to EMC, ETC attacks the other side of the trading coin. It identifies what domestic sources are willing to export and finds foreign buyers who want to spend their money on those products/services.
An ETC sometimes works on a commission basis or takes title to the goods.
Sort of a free agent. He doesn’t specialize in any one industry or line of products and has no specific client base. His goal is purchasing of goods directly from a domestic or foreign manufacturer. He then packs, ships and resells the goods on his own. Unlike the EMC, he assumes all the risks (as well as all the profits).
It is important that you take the time to research and plan your trading business if you have aspirations of becoming either a part-time or full-time trader. You should also think of things that seem unimportant at the beginning but they turn out pretty vital – to fully concentrate, will you be able to work from home or will renting an office be a better idea? A piece of advice – if you opt for working from home, pick a part of the house where you won’t be disturbed. If, however, you want to go for an office, we suggest using a container shelter – they are way cheaper that full blown offices, comfortable and easily decorated. For starters, a container shelter will do the trick.
To avoid failure and finding yourself back at the beginning (but with a lot less trading capital), make sure you have a well-researched trading plan and an idea of how things work before you dive into trading too soon. Realistic expectations are the key to successful trading business. A piece of advice – don’t treat trading as a hobby or a get-rich-quick scheme. Treat it like a business and a goal, a group of successful people you want to become a part of.