Treat Your Trading As a Business - Part 1

You. Hi, Brian McAvoy here with Inside Out Trading. And in my last video I had talked or touched briefly on the importance of treating your trading like a business and how for a lot of people, if you've never run a business before, it's not so easy to do that, especially in trading. I mean, running a business, if you've always been an employee, running a business is enough of a challenge, let alone setting one up from scratch. I mean, you're self employed. So that's part of where the other challenge really comes in is, okay, so I've got what's not a normal business anyway? At least not normal in the sense most people think of a normal business. And then of course you're saying to yourself, well, I've never run a business anyway, so how am I supposed to treat trading like a business? What does that mean? Just take it seriously? Well, yeah, of course it does mean take it seriously. But to put a little more clarity to it, what we're talking about is as far as treating it as a business, that means to bring a little formality to it and some structure. That actually is really the biggest benefit of treating your trading like a business. It gives you structure and it clearly defines your different roles that you really need to play as a trader. This is a business. I mean, any activity that is engaged on a regular basis for profit is a business. Now it can be a fine tuned, well run, smooth and profiting business that has a high degree of repeatability and predictability to it, or it can be a very random, sporadic and spontaneous business. Now in trading, the goal is consistent profits. In order to have any kind of consistent results, regardless of what you're doing, it doesn't matter if you're trading or bowling or golfing or driving. If you want consistent results, you've got to be consistent in what you do. And that's really where treating your trading as a business, setting it up as a business, putting in place many of the things that a regular, normal business has. It gives you structure and it brings that consistency to what you do with your whole trading operation. That's really the big benefit of treating your trading as a business. It's a great cliche, or not cliche, but it's a very common saying in trading circles. The point is, like I said, it brings consistency and some organization and some structure into what you're doing and also gives you some good direction, some clarity. It helps define your operating parameters. One of the biggest challenges that a lot of traders have is a person gets into it. You really don't know what you're doing at first. And so you might try this, you might try that. Well, you hear about this and you learn about that. There's a lot of randomness. I mean, things are not methodical from the get go. You have to go through a learning curve and establish the methodologies, the practices, the routines and the structure, the whole repeatability of your organization. Hopefully it does have a high degree of repeatability. I mean, that's where your repeatable and consistent profits come from, is in the repeatability and consistency in what you do. That's the main thing I wanted to talk about today is why you want to treat your trading like a business, but what that really means. And to give it a little bit further definition now, I want to keep this video short. I will continue in more detail on the next video and if you'd like, you can catch us on YouTube or you can go to InsideOutTrading.com either one. And like I said in the next video, we'll pick this up and we'll get into some more detail on how to treat your trading as a business. In this one, I mostly wanted to touch on why and what that really means. So Brian McAvoy with Inside Out Trading. Talk to you soon. Cheer.