Brian McAvoy from Inside Out Trading argues that successful trading requires treating it like a business, not a hobby. You need a written plan, clear financial goals, and the discipline to execute it. Most people fail because they skip these fundamentals.
Hi, Brian McAvoy here with Inside Out Trading. And today we're going to talk about. For me and a lot of traders, it really is a fun topic. If you're of an entrepreneurial nature, if you're looking at trading as a financial asset that's going to pay you and be an asset and grow for you and help you grow wealth and income for the rest of your life, this is something that, this is a conversation that you'll probably want to jump into. Now, here's what we're talking about. You've heard the wisdom somewhere along the way, but hopefully you have to treat your trading as a business like you would any other business that you might invest in or decide to start up. And here's the thing. There's money in this wisdom. There's serious money in this wisdom. If you'll pay attention to it and not just dismiss it. Oh, yeah. Treat your trading like a business. No, it is a business. This is not an investment where, you know, like a mutual fund where you set your money over there and the fund managers run it and you just kind of keep an eye on it. No, this is an active business. I mean, if you think about it, if you look around you, the computer that you're watching this on or your phone represents probably hundreds of businesses. Every. Everything around you that's not natural, that's man made represents a business. Somebody saw that activity. Hey, I can make that thing or I can provide that service. I can create that plastic or that I can go get the metals out of the ground for the copper wires and the silver to make electrical components of the, the what you're using now, everything that you look around at you is a business. Somebody's making these things and they're doing it on a regular basis for profit. Every service that you get, whether it's dry cleaning or home cleaning or you get your car washed or your car worked on, people doing work around your house. Every service business, it's a business, it's a rate, it's a repeated activity for profit. And trading is no different. You are actively trading, you're putting in your time, actively doing a repeated, you know, process for money. So understanding this, that yes, trading is a business, it's not just passive investing where you send your money over there and it's going to work for you. No, you're working in this business and it is a business. And so the thing is, what's really. Okay, so the thing is, what's really crucial is that you understand. Okay, that said that. Yeah. Okay. Now we've established, yes, trading is a real business. So what does that mean from a. Well, I wanted trading to make money and, yeah, provide me an income so that I can quit my job and maybe go buy a boat or go live in a cabin or go golfing and travel the world or whatever. You're doing this, like I said, because you want a financial asset that's going to produce income and generate wealth for you. And again, it's a business investment. So understanding that, well, there's a couple things about that since it's an active business where you're involved, if you look at any business plan, well, first of all, do you have an actual business plan for your trading? Not a trading plan on how you're going to be getting in and out of the markets and making money, but your actual plan for the business of your trading where you're saying, okay, over the course of the next five years, or at least the next year, this is what I'm looking to achieve financially with my trading. And you actually have some goals. So many people say, oh, you never know how much money you're going to make from trading horse hockey. You can. There is an element of predictability to it. In every business, there is an element of uncertainty. In every business, there are levels of certainty. And that's how people can build businesses. And trading is the same way. So regardless of how you're going about your trading, you can put together a plan and say, these are my intentions, these are my objectives and how I'm going to accomplish them. And then you lay out a specific plan and you look for strategies, trading strategies, risk management strategies, that kind of stuff to achieve those financial objectives, just like any other business. Cool. And one of the biggest things in a business plan is the executive summary. Because you can have a great plan, it can be the best. You can have the next Uber, the next Microsoft killer business plan. But you got to have the right, right person or people executing that business plan and making it happen. Now, with trading, you're the person, the executive summary. It says you, you're the one that's doing this. And here's the thing. When you look at a standard business plan, a traditional business plan, the first section is the executive summary. Because whenever you're looking at a business plan as the investor, which you are the investor in this business, you are a business investor. You could have taken your money and put it in other businesses, but you chose trading with any business that you did, somebody, let's say somebody comes to you with a, you know, a business plan. They say, hey, I got this great business idea. You're like, well, do you have a plan? Okay, yeah, I've got a plan. Here, take a look at the plan. The reason the executive summary is the first thing that you want to see is because it's like, okay, it's this person that's going to be executing the plan. Are they qualified to do it? Are they going to be able to make the plan happen? Do they have the skills? Do they have the knowledge? Do they bring the experience to be the person that's going to be able to competently execute this plan? Or is it somebody. I mean, you wouldn't want some Yahoo.
