Over the past three weeks, we have talked about the steps to becoming a successful trader. So far, we’ve covered 1) visioning, 2) rules-based trading, and 3) trading mindsets. And now, it’s time for the fourth and final step to successful trading.
People commonly treat trading as just a hobby. But trading is more than that – it can hand you the kind of money that will allow you to break out of that monotonous nine-to-five.
Everyone wants to be their own boss – when it comes to trading, you can be. Successful trading can leave you feeling clear and confident, as long as you go about it the right way.
The best part is, it’s a whole lot easier than you think.
This is the last step you need to finalize your trading success…
The Six Sides of Successful Trading
Think about business owners – they are all different. Successful business owners, however, have a few things in common. They all take the following steps:
- Entity Structuring
Successful traders take these steps as well, but there’s one key different. Creating trading success is a whole lot simpler than starting a business. And in a lot of cases, it’s a whole lot more profitable, too.
Let’s break each of them down one-by-one…
We talked about the importance of having a trading vision in part one of our Successful Trading Series. Knowing why you want to trade is one of the most important steps toward achievement. That “why” is what will light you up, giving you the motivation you need to succeed.
You should be able to feel your vision driving you in each present moment.
That’s when the magic really starts, and when your vision is most likely to come true.
So, do this for your trading. Build a vision of what you want in your abundant life, and don’t hold back. Trading will be your cash machine.
Then, take action!
The first thing to do is build a series of steps to begin trading.
Create a trading plan with each step identified, along with when it will be completed.
Which brings us to the next part of successful trading…
In any business, you need a high level of expertise in order to succeed. This is particularly true in trading – but getting that expertise is easy. All you need is education and practice!
I have been teaching people to trade for decades now, and have seen thousands of people gain trading expertise.
Mathias Jefferson is one of them. In fact, he made $3,500 off of a single trade! He said, “Tom, I have made a ton of money from your services. They are truly changing my life for the better. Thank you!”
Mathias isn’t the only one, either. Terry Talbot made $1,750 in one day – all while the market fell 600 points! She said, “I have made much more money than I have lost. I am now positive for the year – something I haven’t been for the past 20!”
My life goal is to help you trade your way to a life-changing amount of money. Mathias and Terry are just two among many people that I have helped – and you could be next.
However you decide to educate yourself, just do it! As long as you have the correct trading knowledge, you’ll be on your way to success in no time.
As a trader, your “inventory” is cash. Traders essentially make money out of money. They spend part of their inventory in order to generate more of that inventory. You can start out small and build up your trading account from there.
In order to trade successfully, you will need the following tools:
This is an obvious one. Although it’s possible to bypass a computer and trade verbally with a broker, most successful traders use a computer. Don’t skimp on this one!
There are many brokers to choose from. Some specialize in stock options. Trading options is one of the most lucrative – and lowest risk – ways to play the market.
If you plan to trade options (which you should), be sure to do your research and get a broker with a good reputation. Great brokers offer friendly interfaces, good/quick fills, and advanced order types (e.g. contingency orders and one-cancel-other orders).
- Analysis Tools
Analysis tools provide trading opportunities. In fact, I run my own trading business using analysis tools! They scour the markets and present only the best opportunities. Essentially, they are the “work horses” for my trading business.
Additionally, there are other third parties that provide analysis tools. Most brokers provide analysis tools as well – just ask!
- Research Services
Research services are a great way to gain trading experience. And you’re already a part of one – Power Profit Trades!
By reading research services, you can get in the game with those who know what they’re doing.
Successful traders use a forecast to detail how much money they will net over time. They account for expenses, losses, and income, and clearly identify their net income month-by-month and year-by-year.
Imagine having a forecast that details your monthly profits and losses along with your net profits. You can clearly see how much money, or “inventory,” you’re starting with and how much it increases month-by-month.
Here is an example forecast to illustrate:
This forecast shows how much capital is required to run the business, how many trades to employ per month, the number of wins needed per month, the total profits (P) and losses (L), and the net P/L per month.
This particular forecast is based on actual back-tested performance. It generates $5,436 per month on $3,000 of capital. Imagine how this would impact your drive and motivation in the present!
Your bright financial future is clear – and so are you.
Successful traders have coaches, just like successful athletes. A coach is an expert who can guide you and see what you may not be able to see. This is particularly true when you are feeling emotional and can’t see straight. Remember – it’s important to separate emotions from trading.
If you aren’t able to pay for a trading coach, get into a trading group or club where you can share ideas and support each other through the oftentimes emotional world of trading.
6. Entity Structuring
Simply put, entity structuring = tax deductions and asset protection.
Now I can’t give you any personal financial advice – but your tax professional can work with you to determine the best way to build an umbrella of protection around your assets – and reduce your tax liability, too.
Additionally, entities can create an umbrella of protection around your assets (money). There are numerous types, but a few that are common are Limited Liability Corporations (LLCs), Limited Partnerships (LPs), and Corporations (C).
Consult your own tax professional to determine which entity type is best for you.
There you have it – the four steps to successful trading. To recap, over this four-part series, we have covered the following…
Source: Power Profit Trades