Lauren Jones
Lauren Jones

Do you want to trade the markets for a living? Are you looking for an alternative business to the one you are currently in? Trading CFD’s and futures can be very profitable, but you need to approach trading like a business if you want it to deliver the same benefits. For employees who have never owned their own business, this might be a new approach and if you are looking to replace your income you must be professional about it.

The first step is to educate yourself. To trade successfully you need to adopt and follow a methodology. This will give you the content to create your Trading Plan. You then need to establish how and what you will trade. For example, are you considering the Australian market or the US? Are you interested in a market that trades 24-hours or perhaps one that trades overnight so that you don’t have to watch it all day? Will you trade CFD’s or futures? Remember, there’s nothing to stop you gaining experience in one instrument before moving to another.

Every good business has a business plan. Your business plan should detail how much you plan to commit to trading and how much you plan to make. For example, you might decide to start trading with a $20,000 account. Based on your level of trading, you need to also identify a profit goal. There are two ways to establish this. One is through your own experience and the other is by back-testing your methodology. You might refer to my previous article called Backtesting – Where Hindsight becomes your Foresight, which explains this further.

Of course, as you gain more experience you will want to educate yourself further and an allowance for continuing education and study should be included in your business plan. Your increasing knowledge and experience will likely lead to improved performance each successive year, so you might factor in increased returns as the depth of your trading grows. Like most businesses, you will need invest in the start-up before seeing significant return on your investment.

Allow time for more study within your business plan. The more you trade, the more you realise you could learn about trading and so you continue the learning cycle. For example, you might have attended the introductory Trading Tactics seminar and then progressed to learn about Price Analysis and Price Forecasting at an Interactive Trading Workshop. As you master these techniques you will be ready to add Time Analysis and Time Forecasting to your techniques. These are taught at Safety in the Market’s upcoming three-day Gann Jump Start and Gann Mastery workshops.

You should revise your Business Plan each year to encompass the developments you’ve made and slowly but surely, as you build up the tools and techniques in your Trading Plan, the results will show through in the form of improved profits.

It’s the journey

Lauren Jones