Trading as a Business
Successful traders treat trading as a business, not a hobby.
Business Structure
Trading Plan = Business Plan
Document your:
- Trading strategy
- Risk management rules
- Performance goals
- Review processes
Trading Accounts = Business Accounts
- Separate trading capital
- Track expenses
- Calculate net performance
- Plan for taxes
Financial Management
Capital Allocation
Conservative Approach:- Live off other income
- Only trade profits from trading account
- Compound gains for years
- Monthly: 3-5%
- Annual: 30-60%
- Realistic expectations
Drawdown Management
Response to Drawdown:- 10% DD: Review and continue
- 15% DD: Reduce size by 50%
- 20% DD: Stop and evaluate
Record Keeping
What to Track
- Every trade (entry, exit, size, fees)
- Win/loss by setup type
- Win/loss by session
- Emotional state notes
- Market conditions
Key Reports
- Daily P&L
- Weekly performance review
- Monthly deep analysis
- Annual business review
Continuous Education
Weekly Activities
- Review trades
- Study losing trades
- Backtest new ideas
Monthly Activities
- Performance analysis
- Strategy refinement
- Market research
Annual Activities
- Complete system review
- Goal setting
- Education planning
Mindset Shifts
- Focus on process, not profits
- Accept losses as business expenses
- Continuous improvement
- Long-term perspective
- Professional discipline