Right now, is the absolute best time of the year to create a new trading business. If you are a traditional retail trader this post is for you. I created my own personal trading business over six years ago. It has been an incredibly good decision.
One of the best advantages about trading in your own business and not personally as 99% of traders currently do (while paying the highest taxes possible), is tax loss insurance. Yes, insurance against major losses! In Chapter 3 of my book The Business of Trading, I detail the pathway to this low-cost insurance that protects your downside. This advantage alone can be worth tens of thousands over the coming years.
This downside protection is especially important for new traders coming into the profession. Many new traders take a beating right out of the gate as the pros eat their lunch, taking their money week after week. The major broker/dealers report millions of trader accounts have been opened again this year. Ben Carlson, CFA, recently posted a list of studies showing 70 – 97% of traders losing money within a year. It seems repeated beatings can be the norm, at least for day traders. It’s time to stop the bleeding. Why anyone would trade without tax loss insurance is beyond me. Perhaps they are not aware of its existence. I’m attempting to change that!
Like any other calling it takes training and good skills to become a consistent and profitable trader. Whether you trade equities, crypto, options, or futures doesn’t matter. While you are gaining experience it’s best to do it in a business structure. There is absolutely no reason anymore to trade outside a business.
One of the best benefits of trading is the ability to create a flexible lifestyle not seen in many professions. Are you tired of driving to work daily and feeling stuck, dealing with co-workers and unappreciative staff? Instead, how about trading when and where you want, more or less for whatever your individual goals require. I have a personal list of over 100 reasons why I trade for a living. I created the list while gradually transferring out of the daily grind of traditional work life. Maximizing your trading income by setting up a trading business and gaining trader status when filing your taxes can be the smartest financial moves you make over the next decade.
Enuf said.