How to Treat Your Trading As a Business Part 4 - The Manager

Hi, Brian McAvoy here with Inside out trading on YouTube. I'm known as Trader Brian. And in today's talk, we're going to examine the role of manager in your trading business. Now last time we were talking about the role of the owner investor. Where you want to look at the, at your trading business as an investment, a business that you've invested in and where you've, you know, you looked at your personal and your financial objectives and you've decided that yes, trading, you know, will meet these objectives and you know, you've kind of given your business manager some specific or some specifics as far as, you know, what, what the objectives of the business are going to be on a monthly and yearly basis. And also understanding, defining that there will be a start up period and how much you're willing to invest in the business, the resources that you're going to give your manager to run the business with. Today we're going to look at the role of the manager. Stepping into the role of the manager, period, periodically is critical. And here's why. If you try to run the business as a trader and you're both the trader and the manager and the owner all at the same time, and you are all three, all the time, it's going to give you some conflicts and make things challenging and distract your focus. Also make things a lot more emotional when you can step into the individual roles, especially that of the manager. And you do it at a time when you're not in the middle of your trading, when say you take the time to do this when the markets are closed and maybe when you're taking a short break from your trading so you're not in trader mode, you are in business mode, manager mode, and you can do so with a clear head. And here's some of the things that the manager is going to tend to for your business. Now the manager management in most businesses is running the business and dictating first of all, things like budgets. How are you going to manage your money overall for the business and what kind of budgets are you going to allow for yourself as far as your expenditures to run the business, what are you going to pay to set it up? Now as far as setting up your business, that's when you're sitting there deciding, well, I need a computer, I need some software, I need data feed, maybe a signal service, maybe I want to go out there and purchase a business model to work off of or a trading model as in a trading system. And so, you know, you have to allocate the resources for that, in addition to your printer, you might also have, are you going to have your broadband service for your computer, do you want a fancy printer? All the things that are going to be equipping your business and setting it up physically, so to speak. So that's one of the initial decisions, but also an ongoing decision. You do need to set yourself up for budgeting so you can control your cost. Any business does have to have financial controls as part of it. Now your manager, your general manager, so to speak, is going to also be laying out the money management rules for the trader, the risk management rules for the trader, and making the selection on, yes, where you're going to trade, what market you're going to get into, what strategy you want to employ. I know I talked about that as one of the owner roles, but that thinking from the owner's perspective, as far as the financial objectives, that is where it kind of crosses over into the manager role. Manager is the one who says, all right, the owner's giving me these financial objectives to meet as far as income and outlaying specific goals and a time frame. Now as the manager, I have to figure out how the business is going to make that happen. And this is where you put, you have your thinking capital and this is why it's so important not to do it while you're trading. You do it when you can think about it strictly from the point of a manager, somebody who's going to be running the business and tending to matters on a day to day basis. So you've got to set up your budgets, you set up your, your financial operational rules, the risk and money management rules. It's also important as the manager that this is where you put in the rules that aren't part of your trading system. The rules like, okay, well, as the trader, I mean, just like in any business, you know, say in a manufacturing operation, you're going to have, you know, safety rules, you know, clothing rules, rules of contract conduct within the facility. You can't go in here, you have to wash your hands with a lot of distractions. The lessons that are learned from the mistakes is where the manager needs to step in and set the rules for the trader. Now here's where this is so advantageous. When you step into the role of the manager and this is where you can lay out the rules. You can look at how things have been going for the trader or how you want it to go. You can look at mistakes that other people have made. You can look at your budgets and your rules, your general operational rules, this is where you lay all those rules out. This is where it gets good though. When you step into the role of the trader. Now you don't have to worry about all those things. Your job as the trader is simply to follow the rules. You come in, you execute the trades and you make sure that you're adhering to the system and your other rules. And that's really a liberating way to work. Just like when you go into your job. I mean, if you had to worry about everything at your job, it would make it very difficult to function. But when you can go in and this is all your job is and you can just focus on this, this is my system to work with, these are my rules, this is how many trades I can place in a given time period. And everything is laid out for you. And all your job is, is just to do the job and to execute it and execute well and stick to the system. If it's not going great, fine, we'll let the manager worry about that when the manager comes back. Because see, here's the other role of the manager. The manager now comes back and reviews the results of things. When you're in manager role, not in the middle of the trades. When you're in the manager role and you're detached from your trading, then is when you sit down and you go ahead and you generate your reports at the end of the week or the month or maybe even the day, depending on how things are going. Some businesses like to have daily manager meetings, others like to have just a weekly or monthly review. That would be up to you. But you need to step into the role of manager and that's when you're going to put together certain reports and you review those reports and see how they match up with your objectives, the goals that you set the business. Now, just like you've heard me talk about with the Trading performance Analyzer, there are certain metrics that go along with trading to make the bottom line what it is. Well, as the manager, this is when you want to track those metrics. When you're the trader, you don't need to worry about the metrics because your job is to just do the job. When you're the manager, that's when you look at the metrics and see what needs to be changed in the overall operation or the rules or maybe you can add some additional rules. So separating the roles really does help because like I said, it helps you keep it clear head. It lets you focus on the task at hand and it also lets you focus on certain tasks when you're in the right frame of mind to do that particular task well, in your trading business, there are certain management tasks that are part of it and you need to be able to do those at a time and in the right frame of mind to accomplish those things well. When you're a trader, all you really need to worry about is just executing the trades well. You don't have to worry about everything else. Do that when you're in manager mode. When you're in trader mode, get in trader mode and just follow the system. That's a real quick overview on the manager. In the subtle trap of trading, I also list out the 11 elements of a business and your trading business. I've touched on a few of them here in this video. Again, if you want to kind of jump ahead the videos, swing by InsideOutTrading.com and pick up a copy of that. You want to just wait for the videos, watch them for free, that's fine too. But like I said, treating your trading as a business, it's very commonly heard phrase. It is good advice and there are tremendous benefits to doing it. It makes things a whole lot easier, takes the stress out of things. It gives you direction and purpose. Do stick with me on the videos here. You'll get a lot out of them. We're going to get more in depth on all these different topics. Brian McAvoy, Inside Out Trading on YouTube I'm known as Trader Brian. Cheers.