Treating Trading as a Business -- By: Bill Kraft
Copyright 2008, CutLoss, Inc., All Rights Reserved
Bill Kraft
Editor |
How do you think of your trading and investing? Is it a hobby? Is
it gambling? Is it something you do when Uncle Fred gives you a tip or
when you see something exciting about a company on television? Have you
devoted time to learning strategies or do you just buy a stock when you
"think" or "feel" it is going to go up? Do you have any exit strategy?
Are you a buy and hold investor, and if you are, until when will you
hold? Do you make your own investment decisions or do you rely
completely on someone else? Have you defined certain times that you
will devote to your trading or investing?
The bottom line is it is your money and you can do whatever you
want with it. As hard as people work to make money, it never fails to
astonish me how little time and effort so many are willing to devote to
becoming good at investing. It seems like a lot of people I've spoken
to about investing over the years do treat it as a hobby or as a
gamble. In the sense that all trading involves risk there is some
gamble to it, but if done properly, the trader can try to give himself
an edge and he certainly can manage risk if he is willing to make the
effort. It is beyond me why so many people seem to make no effort to
learn or understand investing or even their own investments when the
truth is that they are risking hard earned money and have the
opportunity to enhance their quality of life and potentially their
retirement through sound investment practices.
If you were to open a business, it is likely that you would have
done your due diligence. You would have studied the business,
formulated a plan, determined where the risks lay, estimated the
likelihood and size of potential successes, and decided when and how
much time you would devote to the enterprise. Why? Because you
wouldn't want to lose your investment and you would want to work to make
the business profitable. How is trading any different? It isn't. The
investor who treats his investing or trading as a business has an
important leg up on most others. It does mean some work as does the
creation and development of any business, but the rewards can be fantastic.
In my first book, "Trade Your Way to Wealth" , I emphasized the
importance of making your trading a business. I set out, in detail, a
way to create your own specific business plan and discussed specific
elements to include in that plan. I explored risk awareness and risk
aversion and concepts of money management. All of these things can help
you work to become successful. Who has a better chance to be a
successful investor -- the person who has made it a point to learn at
least the fundamentals of investing and who has created his own plan or
the person who heard something about a company and buys the stock?
Anyone can be lucky with an individual stock pick, but it is the
knowledgeable trader who cuts losses, applies appropriate strategies,
and exercises money management skills who is more likely to prevail in
the long run.
Next weekend, I'll discuss a few simple principles that have helped
some of my students improve their trading skills.
Good Trading!
Bill Kraft
Success Trading Group -- by the Success Trading Group Team
Our Success Trading service delivers quality trading ideas for the elite investor that has the financial wherewithal and market nimbleness to profit on small moves in a stock's price. Become a member and you will be provided with email and/or PDA alerts intended to provide you with the opportunity to make many, many profitable trades.
Trade Quality
Stocks Over and Over Again
Over 320 winning trades and only 9 losses!
Register Now
and Get $50 off our Normal Website Rate
Option Trader -- by Bill Kraft
Our Option Trading Service is for conservative traders that understand leverage principles and enjoy the challenge of options trading. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on always minimizing our losses!
The Option Trader service utilizes standard trading in Puts and Calls as well as strategies using Leaps, Straddles, Credit Spreads, Calendar Spreads, and Naked Puts. But no matter how sophisticated a strategy may be, we ALWAYS know our downside potential on every trade.
Here's a look at a trade Bill is currently working on:
FedEx Corporation (FDX)
FDX looks like it might be establishing a support above
$80 which could give rise to a 80/75 bullish put spread or perhaps a
naked put sale of a short term 80 strike.
Good Trading!
Bill Kraft
Try our Option Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
Achieve returns with us like
16.48% return in 5 days!
Trend Trader -- by Bill Kraft
Trend trading as we try to practice it is a form of momentum trading. We prefer to try to capture profit out of the middle of the trend rather than try to catch reversal at bottoms and tops.
Here's a look at a trade Bill is currently working on:
QUALCOMM Inc. (QCOM)
Qualcomm has been diving with the markets and now is
giving some indication that it may be ready to turn. At this level it
definitely bears watching.
Good Trading!
Bill Kraft
Try our Trend Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
$10 Trader -- by Bill Kraft
We really enjoy trading stocks that are $10 and under. Often they provide the chance to enjoy high percentage gains and, of course, at worst, the risk is limited to what we paid for the stock.
Here's a look at a trade Bill is currently working on:
Bovie Medical Corp. (BVX)
BVX has been moving in a channel between $7 and $7.50. A
bounce off $7 or a breakout above $7.50 would be times to evaluate a
bullish entry. At the moment it is in the middle of the channel.
Good Trading!
Bill Kraft
Try our Under $10 Trader Real-Time Alert Service!
Dividend Investor -- by the Dividend Investor Team
Our Dividend Investor service focuses solely on the "best of the best" dividend paying stocks. We attempt to buy these stocks for their powerful dividend producing income; and we will also buy these with a purpose to make capital gains as the stock increases in value. Our Dividend Investor service is a perfect fit for an IRA account.
Register Now
and Get $50 off our Normal Website Rate
