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You want to be a Share Trader? Treat it like a Business

Trading as a Business
Written by Andy

Now is the time. Time for what?

Time to get serious about your financial future. Why do I say this?

Here’s why –

There are two classes of financial intelligence. The first class is the ignorant.

This class usually lives completely oblivious to what is happening around them financially.

I’m not sure whether you are in this class, but here’s a small test.

When petrol prices started to increase two or so years ago, did you think to yourself – “Hmmm… This could be a good time to buy WPL or BHP shares?”

If you didn’t, that’s OK. However, every day around you, there are examples and opportunities presenting themselves.

Are you in tune with them?

If you haven’t been in the past, you need to be right now.

The second class are the informed. This is the class that usually doesn’t buy the mainstream newspaper, they tend to read the financial review or Smart Investor.

They don’t watch only the 6pm news, they also tend to watch this or that business channel. This is the group that has their antennas up and is in tune with what is happening in the financial world.

So here’s your opportunity right now. Great wealth moves from the ignorant to the informed. Even if it seems like times are changing, there are many great opportunities waiting out there.

Share trading is the one business I know about where you can get started with little investment and where most of the information and education comes free. Grab the opportunity now. But treat it as a business.

The most cost efficient way to a share trading business would be to educate yourself in all of these vital skills before attempting it:

  • Education
  • Market Research
  • Market Profitability Research
  • Watch List Building Skills
  • Trading Plan Building

Once you acquire all of these skills then you will gain an “intuition” about how to make money in any market that you explore. It then just becomes a matter of “do you really want to spend your time doing the things required in that market to make money”.

You will also avoid spending unnecessary thousands of dollars going to seminars and buying “black box systems” in an effort to create a share trading business based on only a “desire” to make money.

The mechanics of making money in the share market become confusing when you haven’t gained your range of skills yet. You become distracted with “marketed opportunity” and never gain the knowledge and expertise to create your own opportunity.

Various marketers sell share trading in a fashion that promises wealth or promises a way to quit your day job. I call it hype. The main benefactors in these situations usually are the providers of these opportunities. These providers become the guru. The psychology is not very different from being charmed by a spruiker at a nearby auction.

A 1927 song about the stock market. I am sure it is as relevant today as it was then, reminds me of OPES and Tricom. The song was recorded by Frank Crumit and is titled: “The Tale of the Ticker”. Enjoy it.

Your Intent versus the Outcome

Your first and foremost plan must be to educate yourself. All the successful people I have known have as part of their fundamental belief: they take on the mind set of an apprentice. They acknowledge that there is much to learn, much that they don’t know. You must allow yourself to make mistakes – manage your risk and grant yourself the time necessary to work toward a level of mastery.

Your intent to profit in the share market will be directly related to the extent that you believe that you can make money by trading shares. Your intense belief will translate into actions. Nothing happens until you convert belief into action.

Let me put it this way: If you just “try” to make money in the market you will only seek ways that allow you to keep on trying. This is what the spruikers are trying to get you to do. This can lead you to jump from one seminar to another, from one plan to another. Now don’t get me wrong: There are plenty of free seminars you can attend and learn heaps. But watch out so that you do not spend money you would be better off keeping it in your trading capital. Protect your trading capital at all times.

Otherwise you will feel that you are working very hard, “running” faster and faster and you will think that this effort will lead to success.

This thinking is, of course, flawed. Nothing ever happens unless decisions are made. The brain is a powerful tool that always seeks to match input (information) with thoughts. Your subconscious mind will match your input with your thoughts and, assuming you can make decisions, will lead to actions. Nothing can happen without action.

The brain is a powerful tool that always seeks to match thoughts and information. As you focus on trying to make money, your brain fires up & starts flowing with thoughts that match that focus and then you begin seeking those ways. Those thoughts lead to action, action then leads to more thoughts and so it goes on. But nothing happens without action.

But if you are only in a trying mode, trying to make money, then you will go down a bad track. Making money in share trading is not hard. It is as easy as you may think it is. But it requires decision making and action based on a proper business plan.

You have to get the education, get the skills to research the market and get the drive to make money. You need to have the will to create a trading plan and stick to it. Share trading is a business. You have to get the skill to create proper watch lists and to update them consistently. You have to continue to evaluate the market, to research and to explore.

Most of all, you need to have the desire and the discipline to change your desires into actions. In today’s uncertain markets, a sound strategy is more important than ever. There are abundant opportunities for profit, but taking advantage will require a clear and disciplined approach.

You can combine fundamental analysis with technical analysis. I mentioned before that you should create good watch lists and update them. Watch lists can be made up of stocks based on fundamental analysis, directors purchases, yearly highs and a number of other factors. You can the keep track of these stocks with good, but simple technical analysis on a daily basis.

If your trading plans are set and if you act on your trading plans, you have a very high chance of success.

It depends on you, you are the pilot.

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