As traders we constantly hear about creating a solid trading plan but what about having a solid business plan business plan? If you’re a retail trader and you expect trading to create an income for yourself through trading, then you’re in a business. And as a small business, you are going have the challenges that any small business does.
The successful operation of any business is about two things: positive cash flow and a positive balance sheet. Your income must be greater than your expenses AND you must have adequate cash reserves to deal with the sporadic cash flow and periodic draw downs that are present in any business and even more so in a trading business. Proper planning, a plan to build trading capital and having adequate cash reserves are critical to your success.
I have seen many times where a person has overcome the obstacles to become a great trader, only to “retire” and fail at the trading business due to a poor or nonexistent business plan. No matter how good your trading results are, please, make sure you have a good plan prior to risking your future.
For more information on creating business plans, click here to learn about our Trading Triangle Program!
Live with passion!