Real Estate, Finance and Home Articles of Interest


Trading as a Business in Principle and Discipline

by Robert Jolina

Learning the ropes of the financial world can be an overwhelming task. It is easy to believe that only a very select few can conduct business using bonds, currency, stocks and options. Yet while a degree of advanced knowledge is needed to excel at trading, this does not mean that it is inaccessible to ordinary folk. After all, the attitude and skill set required to succeed at finance are the same required to succeed at any other store or company. This should make finance and trading accessible to anyone possessing business savvy.

To ease into the world of finance, the aspiring trader must first and foremost treat trading as a business. Traditional businesses buy and invest in materials which they turn into profit-yielding commodities. Entrepreneurs carefully choose the prices, periods and locations at which they conduct profitable business. This same framework and principle are played out whether one makes deals at a virtual exchange, a secondhand bazaar or a wet market. The difference is that a trader deals with special and large-scaled assets: bonds, stocks, options, properties and currency.

Because a trader doesn't just do business with individual pieces of clothing or food, one must also treat trading as a business in terms of planning and preparation. Though trading relies more on speculation than day-to-day operation, its rigors require no less discipline. A responsible entrepreneur starts his business by thinking of his product and its investment costs, risks, potential and possible payoffs. A trader makes the same considerations in choosing which bonds, stocks, options and currencies to invest in, and which strategies he should employ in managing them. Moreover, just as an entrepreneur does not build a new branch or introduce a new product without conducting market surveys, a trader does not seal any deals without appraising market trends and forecasts. Good trading is still founded on discipline.

Basic business in trading, however, is made stronger when honed into specializations. An aspiring trader must learn how to tailor his entrepreneurial knowledge to the field of finance he chooses to deal in. One who chooses to deal in options can study the basics of the field using option tutorials. In turn, those who want to deal with currency can undergo forex trader training.

If finance is accessible and newbie-friendly, so are these tutorials. Forex trader training, for example, can be taken level by level, so that a student can learn the basic concepts, strategies and methods of buying, selling and investing in currency according to his own pace and interests. On top of being accessible, these courses are also readily available online.

Of course, one must not oversimplify trading as a business. Naturally, there are significant differences between daily businesses and the stock market. In the first place, trading works mostly on speculation. Goods and money are not always concretely transferred from seller to buyer. Nor can the job be called hands-on, as can be seen in the cases of stock investors who don't even participate in the activities that determine the value of their assets. Trading also has a solitary nature. Typically, a businessman in a retail store or corporation manages operations, human resources, and clients. A singular trader, responsible only for his portfolio, does not have to deal with any of these. Regardless of these key differences, the essence and goal of trading and ordinary business are the same. They both have to play the market correctly to gain the most profit.

Having to deal with stocks and options shouldn't intimidate anyone from pursuing trading as a business. Option tutorials, forex trader training, and the like are always on hand to train anyone with basic business savvy into becoming a capable trader.

Published February 21st, 2012

Filed in Finance