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Trading is not a Business

  • #41
  • Jul 19, 2012 2:22pm Jul 19, 2012 2:22pm
Not a business

Analogy:

Business: Bake a vanilla cake you get a vanilla cake (quality varies)
The outcome is (mostly) certain

Trading: Bake a vanilla cake, sometimes you get a vanilla cake (enormous quality variations), sometimes you get a chocolate cake (enormous quality variations).
The outcome is (totally) uncertain.
  • #42
  • Jul 19, 2012 2:33pm Jul 19, 2012 2:33pm
Quoting bigblue
Ninety per cent of businesses go bust in the first year. Of the remaining ten per cent about ninety per cent of those eventually go bust or the owner just scrapes by. So please do not treat your trading as though it was a business. And you should certainly not think of yourself as a business person - business people are typically not all that bright (read Taleb) and are generally control freaks (I should know I built and sold a successful business).
To succeed at trading you need to be something different. It is well known that business types...
If a trader doesn't look at his/her trading like a business, they won't last long. You must get serious about your craft if you want to succeed in trading.

However, in most conventional businesses you can succeed through hard work, or intelligence, or perhaps just who you know.

No so in trading. The skill set needed to succeed in trading is unique. Patience and discipline are key skills in a successful trader. Having a general understanding of probabilities is another skill that can make or break a trader.

This is precisely why so many successful business people fail at trading. They are woefully unprepared for what is required to succeed in the business of trading.

After getting my teeth kicked-in for a while, I realized I needed to start from scratch and build my trading skills from the ground up.

Business? Yes... Different business? Absolutely.
  • #43
  • Jul 19, 2012 2:41pm Jul 19, 2012 2:41pm
Quoting jag1966
The gift of the gab alone will not make you a successful business person, people like that generally crash and burn cos they didn't manage all the back end stuff or pay taxes etc, they are generally the thick ones.
And I thank the good lawd that they aren't all as brilliant and as clever as you are or we would have a forum full of pricks running around saying that they double their account every other week.
Nothing worth having is easy.
  • #44
  • Jul 19, 2012 3:08pm Jul 19, 2012 3:08pm
Quoting Patience
And I thank the good lawd that they aren't all as brilliant and as clever as you are or we would have a forum full of pricks running around saying that they double their account every other week.
Hmm......I'm not to sure what your trying to say ..would you be able to clarify that...
Memories caught in time but never forgotten
  • #45
  • Jul 19, 2012 3:21pm Jul 19, 2012 3:21pm
Quoting fx111
Confidence neutralize fear, but that comes with experience and good results.
and discipline neutralized greed ....and
and so if you neutralized greed and fear ....you are set in trading career
  • #46
  • Jul 19, 2012 3:56pm Jul 19, 2012 3:56pm
Quoting Patience
And I thank the good lawd that they aren't all as brilliant and as clever as you are or we would have a forum full of pricks running around saying that they double their account every other week.
Yeah I just remembered why I stopped wasting my time reading or posting to FF.
  • #47
  • Jul 19, 2012 7:05pm Jul 19, 2012 7:05pm
Quoting Good Lookin

I don't believe business should be the focus here. Like he said in the first post, it's about researching.
Agree.
Being successful at ANYthing will require and share certain characteristics and qualities. There are similar qualities and skillsets between being a professional athlete and a professional businessman, does that mean they are similar, and should be approached similarly? I think a professional trader has more in common with a professional athlete, than a successful business owner.

I think his point is, while there may be similarities, being a successful trader, and being a successful business owner, are QUITE different. You should think of yourself more as a research scientist, than a tanning salon operator, or maybe some combination of the two
  • #48
  • Jul 20, 2012 7:38am Jul 20, 2012 7:38am
Quoting jag1966
Yeah I just remembered why I stopped wasting my time reading or posting to FF.
Yeah, I know what you mean. It's amazing the bullshit that one has to trawl through sometimes.

Oh, and by the way, there really is no need to call another poster a Mummy's boy because he states that he is fully prepared to lose 10K in his journey through the forex market. I didn't see him attacking you for saying you double your account (sometimes more) most weeks. Now, I am in no way from a privileged background and I can make 10K go a loooooooooonnnnnggg way if I have to but I happen to agree with the poster that you called a Mummy's boy.

I don't know what successful businesses you've run but in the real world of successful business and in the real world of forex, 10K is not even worth talking about. Geezus, 10K doesn't even come anywhere near the weekly wage bill of the businesses that, as you put it, the thickos run.

Now back to fantasyland for you. No doubt it's much easier to double your account every week while you are resident there.
Nothing worth having is easy.
  • #49
  • Jul 20, 2012 7:41am Jul 20, 2012 7:41am
Quoting j4d
Hmm......I'm not to sure what your trying to say ..would you be able to clarify that...
My mother ab-so-lute-ly detests that word. I felt like being rebellious ... lolz. Would it help clarify the situation if I replaced that word with muppets?
Nothing worth having is easy.
  • #50
  • Jul 20, 2012 8:18am Jul 20, 2012 8:18am
For me, trading is really like a business. I run a brothel. Lot of up and down movement, even sideways. Lots of different approaches and styles used. Some people like the hourly but drop down to lower the TFs to make an entry. Some also use the lower TFs for their exit, even though the hourly suggests they shouldn't exit just yet. Pullbacks, most people love them. Generally, a double top is less popular than a double bottom but we have to cater for all patterns. Go long or go short, depends mainly on sentiment. Some people have their favourite pairs, others like variety, even exotics. We cater for all needs. Candles are popular but can be messy at times. I even have some clients who prefer to demo only. Others like the big boys - will screw everyone. They often make it hard to make money.
Audentes Fortuna Juvat
  • #51
  • Jul 20, 2012 8:20am Jul 20, 2012 8:20am
Quoting Aldente
being a successful trader, and being a successful business owner, are QUITE different. You should think of yourself more as a research scientist, than a tanning salon operator, or maybe some combination of the two
Yep. They are completely different. Are there ideas one could implement into trading research that have similarities? Yes. But in the end running a business and trading for a living are rather different (except for paying taxes).

Quoting Patience
I don't know what successful businesses you've run but in the real world of successful business and in the real world of forex, 10K is not even worth talking about.
My monthly expenses are usually around 15k. Ironically, i work with 40%-60% margins, or as we would know of it in trading, my RR is skewed BIG TIME against me Lets see how long a trader will last with inverted RR.

The advantage of 'real' business is that one can outsource/subcontract third parties to take over responsibilities i would do by myself, but, this comes at a cost (if dealing with employees):

- They tend to lack self-motivation (it isnt their business...just a job).
- They tend to lie or go on the sick frequently.
- To find the 'diamond in the rough', 100's of employees have to be filtered.
- The cost to employ, taxes, et al are an absolute killer.

So a lot of people are attracted to trading because it does not require huge expenses to do so (no employees, no rents, no huge electric bills,...just you and the market VS. the world).

Happy days.

PS: Most of my customers come in clusters...they are either not here, or when they turn up they all come at once.

Just like a volatility cluster...curious isnt it?
  • #52
  • Jul 20, 2012 8:24am Jul 20, 2012 8:24am
Quoting Patience
My mother ab-so-lute-ly detests that word. I felt like being rebellious ... lolz. Would it help clarify the situation if I replaced that word with muppets?
I'm not to sure..... Muppet doesn't seem to have the same impact.....You could of course go to the other end of the scale, but then.......that might just be the other side of the boundary..

Or..

You could frequent your usual environment, for priceless banter and the occasional........interesting ......."ear bashing".

Or...

Carry on listening to who has an edge, a business plan ( or doesn't ) or who can double their account in a week....

Oh.....BTW I double my account every day ...
Memories caught in time but never forgotten
  • #53
  • Jul 20, 2012 8:55am Jul 20, 2012 8:55am
Didn't realise this thread would get so vicious - obviously pressed a few buttons. Our society has promoted the business person to the status of gladiator - supreme athlete etc. Of course nothing could be further from the truth. Most business people hardly scrape by if they have not gone bust - and business plans (the millionaire by christmas syndrome) are generally not worth the paper they are written on.
Luck is almost everything in business - and if you are lucky but still go bust it's because you are stupid - but average intelligence will do nicely.
Fooled By Randomness by Taleb tells everything for any doubters - in fact Taleb has nothing but scorn for the gladiatorial status if business people.
Positive expectation from your trading method is everything - all the rest is kindergarten stuff. Discipline, money management, patience, risk management blah blah blah are the things people make a big deal about cos they can't solve the positive expectancy problem - which is demonstrably beyond most people.
If you have demonstrable positive expectancy everything else falls into place - you don't have to play at being a business person. If you do play at being a business person without positive expectancy then you are lying to yourself - and wasting your time.
Irregular
  • #54
  • Jul 20, 2012 10:10am Jul 20, 2012 10:10am
Quoting bigblue
Most business people hardly scrape by if they have not gone bust - and business plans (the millionaire by christmas syndrome) are generally not worth the paper they are written on.
The whole business plan thing is a bit of a myth. Everyone has plan, mostly just in their head. Yes, there are some advantages in formalising it on paper as it forces people to justify their assumptions about key elements of their business model. Beyond that their justification is really dependent upon company size. For a small outfit, a one pager which lists some clear objectives, who the client is and include some simple KPIs to measure progress against would be sufficient instead of 100 pages of shite.

I run a team of business analysts (ok, I admit I do not run a brothel - aspirational goal perhaps!). We assess a lot of business proposals. No, I am not in the finance sector. How many of these proposals are supported by business plans? Not many. How many have business plans that actually make sense? Probably less than 10 percent. How many have business plans that are just word templates full of generic crap with the company name changed from the last client a business consultant had. More than you would expect and the idiot consultant's often dont even change the file properties to hide their shameful practises.
Audentes Fortuna Juvat
  • #55
  • Edited 11:03am Jul 20, 2012 10:43am | Edited 11:03am
Well, if it's not according to a business model, then the only other thing it could be is a gambling model. Either one is fine, you are all free to risk your capital any way you like, but at least stop lying to yourself about your actions and the consequences they bring into your lives.
To improve is to change. To perfect, is to change often.
  • #56
  • Jul 20, 2012 10:51am Jul 20, 2012 10:51am
Quoting bigblue
all the rest is kindergarten stuff. Discipline, money management, patience, risk management blah blah blah are the things people make a big deal about cos they can't solve the positive expectancy problem - which is demonstrably beyond most people.
Now, I'm convinced I don't have to read this thread again.
  • #57
  • Jul 20, 2012 10:55am Jul 20, 2012 10:55am
Quoting forexhard
Well, if it's not according to a business model, then the only other thing it could be is a gambling model. Either one if fine, you are all free to risk your capital any way you like, but at least stop lying to yourself about your actions and the consequences they bring into your lives.
Business or gambling - it's a bit limited. Athletes don't have business plans but do achieve - same with 747 pilots, brain surgeons, holywood actors, pop stars etc etc. Don't really know why the business idea has made its way into trading apart from charlatans giving people false hope with '1-2-3 plan your success' fairy tales (now there is a business ot be in). Trading is trading - it is wholly different to business.
Irregular
  • #58
  • Jul 20, 2012 11:03am Jul 20, 2012 11:03am
Quoting Patience
Yeah, I know what you mean. It's amazing the bullshit that one has to trawl through sometimes.

Oh, and by the way, there really is no need to call another poster a Mummy's boy because he states that he is fully prepared to lose 10K in his journey through the forex market. I didn't see him attacking you for saying you double your account (sometimes more) most weeks. Now, I am in no way from a privileged background and I can make 10K go a loooooooooonnnnnggg way if I have to but I happen to agree with the poster that you called a Mummy's...
I couldn't understand why you were so upset until I re-read the whole thread.

The gift of the gab reference was not directed at you at all, it was a reference to real people I have met throughout life that start a business with very little planning no clue about the work required or any clue about profit and loss or running costs, it all goes belly up very fast.

I can see why you would have been upset, I apologise for any offence I caused you, none meant at all.
  • #59
  • Jul 20, 2012 11:06am Jul 20, 2012 11:06am
Quoting Nijee
instead of 100 pages of shite.
... they must be MBAs - nothing personal.
Irregular
  • #60
  • Jul 20, 2012 11:10am Jul 20, 2012 11:10am
Quoting bigblue
Business or gambling - it's a bit limited. Athletes don't have business plans but do achieve - same with 747 pilots, brain surgeons, holywood actors, pop stars etc etc. Don't really know why the business idea has made its way into trading apart from charlatans giving people false hope with '1-2-3 plan your success' fairy tales (now there is a business ot be in). Trading is trading - it is wholly different to business.
Instead of telling us all what trading isn't, how about you tell us what trading is?
To improve is to change. To perfect, is to change often.
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