Trading can be an exciting alternative “traditional” work, but there is a lot of advertising hype in this industry - dominated by stories of wealth and happiness, associated with Trade. May be, this is so for the lucky few, but very many traders lose money and have difficulty getting out of it Business. Knowledge, when to get in - and when to get out - of the business is just as important, like any other trading lesson.
Tax planning is extremely important for traders, but tax savings, which you can create, won't do you much good, if you cannot make a profit on a permanent basis. Reducing losses with tax refunds will not do you much good - you need to stop the losses themselves.
There is a lot of information about, when to enter And go out from deals, but few guidelines about, when to enter and exit the trading business. However, some of Axioms, which traders follow when executing deals - sell quickly losses and let it grow Profits - can be applied to the trading business in general.
If you are constantly losing The money - that is, your trading capital decreases over time - maybe, trading business is not suitable for you.
I'm not a loser
Good luck in trade not necessarily related to, how smart are you, how hard you work, and how much time do you spend Business. People, who have previously achieved brilliant results in the field of medicine, jurisprudence and engineering, often lose significant amounts of money in stock trading.
Like any important decision, leaving the trading business should not be taken in a hurry. If you leave too early, then you, maybe, deprive yourself of the opportunity to achieve mastery in this matter. Besides, you (or other people) may think, that you are a loser. However, sooner or later the realization that, what are you losing money, cannot be thrown aside.
Gambling - be it a casino, or maps, or sports betting, or buying lottery tickets - provide entertainment and an opportunity (sometimes significant) income, but doing it as a permanent career is not realistic. And although trading, undoubtedly, not gambling, there are some common features here, which should be noted, and lessons, which should be assimilated.
Many low net worth and novice traders try their hand at retail or private trading firms, using small amounts of capital. They have an idea of how, what is a career in the trading business, but they don't have much training and support. They often risk their relatively small, but savings that are so important to them. A large number of these traders, Unfortunately, ends up losing his money. Most enter this business without ambitious plans., without special capital or training. Continuing this activity - and continuously pouring money into the trade - can be painful for the trader and his family.. So the question remains: when should they leave this business?
The decision to leave is not easy to make on your own - and you shouldn't.. Talk to family and friends, and also with successful traders, who can understand your problems, and other professionals, who understand your finances.
Trading not an unhealthy activity, such as smoking or drinking, but it can tighten. All necessary clauses are used in the trade industry, required by regulatory authorities, which warn traders about risk. However, they, usually, are printed in small print, and most traders ignore these warnings.
In fact, it can be harder to quit trading, than quitting smoking and gambling, because for many people this is a really viable career.
New job
Many people start trading due to the progressive disruption of the US labor market. Millions of jobs in America - and in the white category, and in the blue collar category - disappear due to staff cuts, Restructuring, shift to outsourcing and homeworkers. Wages are also decreasing, health programs, retirement benefits and other benefits.
Therefore, many people instead, to deal with a capricious job market, switch to starting their own business, and for many, the trading business is the easiest, what you can do. You can be your own master, and you don't need clients, employees and visible overhead. Since, how the online trade revolution began, Waiters, taxi drivers and representatives of other professions, where high wages are not found, quit their job, to seek happiness in trading.
Even highly skilled professionals give up their careers to trade. They started by managing their own accounts in brokerage houses, accumulating significant saving. Some pros have come to love the attractiveness and intellectual challenge of active trading., and also enjoy a taste of success outside of their main career.
Doctors have always liked to talk about money at cocktails., and now, when tax havens are no longer in vogue, their new passion became Online trade. I know many doctors, who were in the trading business but, Unfortunately, most of them suffered heavy losses. Here An axiom are words “need money, to lose money”, but not “need money, to make money“.
The same way, fierce competition, forcing many lawyers to bill 70-80 hours per week, as well as other difficulties, related to this work, often push them to dream of a different career. For some, this means stock trading. Finally, some believe, that they will be able to use their intellectual skills to analyze corporate documents, risk information, industry trends and more. However, trading is much more., than just fundamental information.
Engineers are exemplary examples of independent behavior. They are unsociable by nature (this is good) and can build everything, anything. They are good at handling computers and tools., and the online trading business suits them perfectly. Engineers love to create their own trading systems and algorithms, but are they good traders?
Corporate executives keep a close eye on their industries, and most are also aware of the state of the general economy. They may not be eligible to trade their company shares, but why not trade the shares of competitors - those companies, which they know very well?
Even “ordinary” man thinks, that he has everything, what is needed for trading. May be, these people were early customers of Costco and saw the magic of the process or invested in Google long before the IPO. And if we have invested, why not try buying and selling actively for profit? It's a simple undertaking, for which there are all the necessary modern tools and services.
But…
Add it all up - cut labour market, ease of entry into an online trading business, dreams about, how to get rich fast, the difficulty of perceiving reality and giving up addictive activities - and you will receive a recipe for potential disaster.
Before, what will you enter into trade business, you should consult your spouse (And, if nessesary, with other family members) about that, how much are you willing to lose, and what factors will mean, that you should get out of this business.
We have a lot of clients, who tell us, how they got divorced because, that their spouses are upset about their trade losses. They told us, that they will continue to trade. Instead of, to give up this business, they preferred to ruin their marriage.
Family counselors often say, that finances are the main cause of family problems. Listen to me, what your spouse says about your trading business. If you are not married or do business with your spouse, then ask your parents for advice, relatives and children. Don't turn your back on reality.
Should you take the first step?
Is it wise to quit your career to immerse yourself in the trading business? There are two somewhat conflicting schools of thought, answering this question.
Trade full time increases your chances of success, because trading is very difficult and requires all your time and effort. However, if the trade fails, shouldn't you keep your previous profession like this, so that you can return to your previous place of work?
Try to find a solution, which is suitable for your specific circumstances. Maybe, you will be able to facilitate the entry into the world of trade, reduced risk, but raising the level of education, while maintaining your previous job. However, it is very difficult to sit on two chairs..
If you managed to achieve some initial success, think about it, to suspend your previous work, without leaving her completely, and trade for a while full time. Do not give up your old profession and do not burn bridges, connecting you with partners or employers. There are different ways to keep your old profession - via the Internet, as a consultant or something else. Use all the possibilities, because, may be, they will save your life later.
Many traders in a certain market environment are initially lucky, but when conditions change, they lose not only their initial winnings, but more. The market can quickly change from bearish to bullish and vice versa, but such things, how to increase the risk profile, can also “tip over your cart”. It's hard to make money in the markets all the time. Ditching your previous career entirely is rarely a smart decision..
But what, if you have nothing left of the past, and you have nothing else to spend your money on? Maybe, you are retired or unemployed or you are a house builder or involved in another business, which has no hope of making a good profit?
These are all just additional reasons for, to safeguard your capital and exercise sanity when entering and exiting a trading business.
conclusions
Trading as a business is an enticing venture for only a small percentage of traders.. Most lose money. Ask yourself this important question: if Wall Street traders make up the lion's share of the winners (and so it is), then who are the losers?
If you think it over carefully, discuss these matters with your family, and do not completely give up your previous job, then you can seriously think about, to dive into online trading. However, if required, show enough Discipline, to give up trade, before it is too late.
