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Trading as a Business in Principle and Discipline

by Robert Jolina

Trying to understand how the world of finance works can be understandably intimidating. It is easy to believe that only a very select few can conduct business using bonds, currency, stocks and options. But though a certain level of expertise is expected of professional traders, their circle isn't an exclusive one. After all, the skills required to be successful in finance are the same as those needed to run any money-making enterprise. Anyone with a basic business savvy, then, has a shot at becoming a player in finance.

To make the leap into finance, the aspiring trader should view trading as a business. Ordinary commercial enterprises buy and invest in materials to produce commodities they can sell to make a profit. Businessmen deliberate on the items they buy and sell, including their prices and markets, to make money. This is the same process enacted at wet markets, secondhand bazaars, stock exchanges and trading floors alike. In the trader's case, he simply deals with specialized commodities: bonds, stocks, options, currency, and other large-scale assets, such as properties or goods.

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. An entrepreneur initiates a business by carefully thinking his product through, including the costs that go into producing it, the market it is directed to, and the profit it can deliver. A trader builds his working strategies for managing bonds, stocks, options and currencies based on these same considerations. Just as an entrepreneur conducts market surveys before introducing new products, a trader also studies market trends and forecasts before making deals. Good trading is still founded on discipline.

While built on basic business sense, good trading is also honed according to specializations. An aspiring trader should tailor his basic knowledge to the field he decides to work in. One who chooses to deal in options can study the basics of the field using option tutorials. Forex trader training is also available for those who choose to deal with currency.

If finance is accessible and newbie-friendly, so are these tutorials. Forex trader training, which guides students through the concepts, strategies and methods of currency trading, can be taken at a student's own pace. Most trading courses are also easy to find online.

Needless to say, one must not undermine trading as a business. Naturally, there are significant differences between daily businesses and the stock market. Firstly, trading is highly speculative. 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 have to conscientiously work the market to their advantage to make the most possible profit.

There isn't that much difference between the stock exchange, the bazaar, and the wet market when it comes to the principles and discipline of business. This article explains how it would help the aspiring trader to look at trading as a business, and suggests how basic courses such as option tutorials and forex trader training can help break him into the not-so-foreign world of bond and securities, stocks and options.

Published February 21st, 2012

Filed in Business


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