The Business Transition

“You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody. This is the life of a successful trader.”  Dr. Alexander Elder

There has never been a better time to be a trader. As one makes the transition to trading from other occupations (time occupiers) and professions (licensed time occupiers), some key transition advice is in order.

The question often is whether to transition in a flying leap or slowly. I recommend the latter. If you are already trading on the side and paying the most taxes possible on your gains, the first step would be to establish a business. Fortunately, I wrote the book on exactly how to do that yourself, The Business of Trading.

Your gradual introduction to your own trading business will test the water to develop your confidence and gradually replace your 9 – 5 grind and drive to work. Watching your net trade profit curve rise from month to month will let you know over time that this really can be a lifetime pursuit.

Any deficiencies with your trading and consistent profits can be recognized while your still have a traditional outside income source. The flaws can be dealt with one by one until you know without hesitation the final transition to freedom can be yours.

Part-time trading has some inherent benefits. Trading itself only takes a few keystrokes and a few minutes of your day. But staring at your trade tickers like a neurotic addict can lead to some bad decisions. By limiting your screen time, you are also limiting your potential trading mistakes. Even when you are trading full-time there will be plenty of time for other activities. This past week while preparing our outdoor gardens, my trades were churning out profits once again, all while I never looked at the screen.

Trading allows a lifestyle others think is not possible, but it is.

Stephen Herto

Trades placed weekly and longer allow a swing trader the ultimate flexibility in lifestyle. You can place a weekly trade and peacefully go to work and check on it after your shift without anxiety. Day trading while frequently advertised as a haven for riches is just like replacing your current job with another job. Is that what you want?

Limiting your first account size allows you the ability to make some mistakes without busting your bankroll. Having a boat load of money to start trading can be a problem. If you think a $25,000 account will do better than a $2,500 account, think again. A fifty percent drawdown while starting out is much more palatable with the lighter account. Remember in trading, anything is possible. Start your transition with an account that you could afford to disappear without causing any loss of sleep. Imagine a complete loss, could you handle that? Remember you are trading in shark infested waters. Risk management starts with your account size.

As you make this transition there will come a time when only you will know, its time to move to full-time trading. Some may take several years, some even less. Some may continue with their other occupations they enjoy indefinitely, but on a more part-time basis. You can do this. Travel, explore, expand, grow. Trading allows a lifestyle others think is not possible, but it is. It is simply a matter of application of the self-development you have always sought after anyway.