03.17.17 | Want to Trade Full-Time? Start a Business.
A lot of people see trading as something people do in their free time – at least until they become really successful at it and start parlaying the winnings and doing it more often. When it comes to trading as a business, however, more people have a hard time picturing it. Not so much because they don’t know these businesses exist, but more because they don’t see how they could start such a business.
Starting a trading business doesn’t require you to have already made millions in the stock market. It’s actually a much more realistic business venture than you may think, if you’re interested. Here are some of the key things you should keep in mind if you’re thinking seriously about starting a trading business.
Risks, Risks, Risks
You can’t get too far into an article about trading without seeing the word ‘risk’, right? There’s a good reason for this: before you start this sort of venture, you need to know that it’s a very risky one. But is it really much riskier than other businesses? Judging from the failure rates, not so much.
The vast majority of trading ventures fail within their first year. And when I say majority I mean in the 90% region. But the fact is that the failure rate of any type of new business is very similar. Businesses that fail at trading often fail for the same reasons other businesses do: bad planning and financial management. Don’t be put off the idea, though: it’s an unavoidable fact about the business market. It doesn’t mean you have only a 10% chance of success – it just means that 90% of other businesses made fatal mistakes. There’s a difference!
If you’re going to set up a trading venture as a business, then it probably stands to reason that you’re going to need employees, right? It’s true that this is probably the desired position to be in, but, as with any new business, hiring a bunch of employees in those early days is often financially unfeasible.
It’s more difficult to gauge just how much profit you’re going to make from any given pursuit in this business. But if you agree to given a percentage of that profit to an employee, then this may be a good way to get people into the business in the early days, especially if they’re confident in their abilities. But you could also consider getting the help of robots. Yes, you read that right. Who knew options trading robots can make money for you?
You shouldn’t underestimate how much you’re going to need to start this sort of business. You may think the overhead would be fairly low, considering it can be done remotely – and this is true – but the fact is that you should really be starting with quite a healthy initial investment.
A lot of people make the mistake of assuming that a few hundred dollars is a brave and smart amount of money with which to start trading. But if you’re looking to get serious and start a business out of this, you’re probably going to need at least a couple thousand.
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