Has your day trading efforts left you with little profits and a mountain of frustration? Does your account resemble a ghost town? Are you ready to finally stop messing around, so you can achieve the success that you desire?
If you answered yes to any of the above questions, then there is a good chance that you need to start thinking and treating trading as a business. Nobody ever got rich by working part-time or putting in minimal effort, so in order to take things to the next level you need to organize yourself and get serious!
Once you start treating it as a business, then it has a much better chance of being self-sustaining in the long term, as well as hugely profitable.
At first, you have got the initial hard work out of the way, such as learning the business, set-up costs, getting an accountant, working out your monthly expenses, writing down short and long term goals, and getting the proper equipment and tools, then you will have built a solid foundation that continues to grow year after year, even if you start to spend less time in the office!
This is the key to passive income and living a relaxing lifestyle. You put the hard work in at the beginning, and then a year or two down the line you can start to enjoy the fruits of your labour.
Most people get it backwards. Instead, they look to put minimal effort in at the start, hoping that their business will somehow become profitable and sustainable all by its self.
Unfortunately, they quickly learn that this isn’t how it works, and end up getting serious about day trading or quitting altogether.
Here are some things to consider when building a REAL day trading business:
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Have a dedicated area
Most people nowadays, operate their activities from their house. In fact, this might be one of the main reasons why a lot of traders don’t take it seriously, because it’s much too easy to just sit in bed until noon and the watch television while studying or trading.
The first thing you should do in order to make this into a proper business is to set up a dedicated area to work from.
This could be a spare room in your house, the basement, or even the garage. It doesn’t matter. What does matter is that you have a dedicated space where you will work on your business, free from distractions so that you can remain focused at all times.
Keep accurate records
If you don’t keep accurate financial records of all your incomings and outgoings, then how can you possibly know if your business is successful or not?
Keeping records doesn’t have to be difficult. In fact, many million dollar traders record everything in a simple book, with nothing more than a few columns on every page.
If you want to get a bit more advanced, you might want to consider investing in one of bookkeeping software programs available on the market. These programs can definitely make your life easier, as all you have to do is input your figures and it will do the rest.
Get an accountant
Nobody operating a business should be without the help of an accountant, as they can give you advice that will save you a fortune.
For example, an expert accountant can suggest different company structures that would be beneficial for your own unique circumstances, as well as helping you with your tax returns at the end of the year.
Take your time in finding an accountant, as they are not all created equal. It is a good idea to find somebody who can give you personal attention and will be able to get to know your business better over the coming months and years.
You might also consider trying to find an accountant who has experience at working with people in the day trading field, so they can offer you specialized advice right from the start. At the end of the day, a good accountant will save you much more money than what you pay them.
Become more detached
As you start to treat your day trading hobby more like a business, you should also work on developing the habit if being detached.
People who treat the business as a hobby, usually look at it as a form of entertainment, complete with the highs and lows of winning and losing.
Once you are in the mindset of a business owner, then it is much easier to look at it as a numbers game, where your main focus is on profit and NOT entertainment. That’s not to say that it should be boring and you can’t ever have a bit of fun, it just means that your primary focus is on long term successful trading rather than short term pleasures.
For example, you may find yourself sitting in your office at your computer during a day of trading. You are watching the markets closely but there are no trades to be made that day. In the interest of your business, you switch off your computer and go focus on something else. If your focus was on being entertained, then you would probably be tempted to get involved in the markets even though it doesn’t make sense from a profit point of view.
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The final word
There is nothing quite like owning your own day trading business. YOU are in control of your financial destiny, and have the kind of lifestyle where you can see more of your family and friends.
Just be prepared to put in extra work in the beginning, so you can build a solid foundation that will last you for years to come.
At the end of the day, you wouldn’t build a house on quicksand, and then hope it won’t come crashing down in a few months. Instead, you would make sure the house had a solid base before adding more bricks. This is exactly how you should approach day trading.