Chapter 6 It’s a business; treat it that way

In this chapter …

We investigate the business-type decisions that traders face. Treating trading as a business means that you as the trader are the boss, with all the responsibility associated with that position. While many employees believe that they can do a better job than their boss, the reality is that many if not most would actually struggle with the range of decisions that a business owner has to make. Whether you want to trade for a living or you view trading as a challenge and are trying to generate extra income, you must view trading as a business.

The failure rate among many businesses is high, and that’s the case for trading too. By specialising we are already employing one of the key traits of successful businesses: specialists can learn their market inside and out and are more likely to spot subtle changes to market conditions. Most successful business operators specialise in what they know best and over time they gather experience of their market that also provides edge over new entrants; traders should also act in this business-minded way.

In addition to the trading-related analysis and decisions that we face, we also need to weigh up other aspects of running a business, such as the costs involved and deciding which broker and platforms to use. This is another area that will require a good deal of due diligence before you trade. If you choose the wrong type of broker, pay commissions that are too high or use an ...

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