Significant dilemmas are posed when one decides to work for themselves in a trading career. For example, structuring your time, creating achievable goals and objectives, self-managing the rules you create, and a host of additional tasks.
These concerns are compounded when considering that the independent trader is going up against some of the sharpest and brightest minds in the world.
As most of us complete some form of formal education we often move into the workplace which includes a structure that is already in place. Successful businesses have a defined structure characterized by accountability, operating procedures, agreements, job descriptions, etc…
If one adheres to the structure and does a competent job they are rewarded in a variety of ways. One cannot become complacent when it comes to being an employee of a business because the consequences are swift and unforgiving.
Going Out on Your Own
In the last decade with the advent of the internet many people have decided to go into the trading profession, or, at the very least, manage their own investments on a full or part-time basis. Whether one has the talent, genetic makeup and the education and training needed to be successful is not the focus of this series, rather, it is about creating structure and learning to manage oneself.
For the moment let’s assume you do have some experience and a predisposition to be a successful trader/investor. Let’s also assume you’re not working at a successful trading firm with supportive education, but are trading at home or in an office space that you have rented.
Home versus the Workplace
Let’s draw a distinction between the hours we are at the workplace in a structured environment and the hours we are off work where structure is less defined. Some people have learned to create and manage themselves within a structure that is less defined; however in my opinion most of us find it difficult to create structure in our private lives in such areas as exercise, cultural and aesthetic pursuits, spending money wisely, etc…
When we are at the workplace we are managed (whether you are the CEO or the Janitor), but when we get off work–it’s we who have to manage ourselves. When you are at work and have to manage someone else’s money or their accounts payable it’s easier to be objective within the confines of your company’s accountability and standard operating procedures than when you have to manage your own.
So now we go from a structured workplace and start a trading career where there is no structure, no blueprint and no one to manage you. You’re the CEO, CFO, and the secretary who will have to manage all the resources you have. There is no one to tell you what time to come to work, what your specific jobs are, how to organize your time, what objectives you need, what your trading plan is, or how you will hold yourself accountable for the “rules” you’ve created.
Things do not just fall into place—you are going to have to create a structure (and it’s more than just a three page trading plan), a system, a plan to assist you on how to achieve and measure success because it will not happen any other way. You will have to work very hard to acquire it and without structure things fall apart and you will not achieve your objectives. Successful businesses have a very defined structure (a history) and we must see ourselves like that in the context of trading. The question one must ask is: are we running our trading profession like a business?
Part 2 Focuses on Discipline
In Part 2 of this series we will go into how to manage and discipline ourselves once the structure and the continued building of the structure is in place. For some people (not all) it’s not that difficult to write trading plans and rules, identify weaknesses and strengths, create objectives and goals, yet the true measure of one’s trading success is largely dependent upon our ability to manage ourselves, to create discipline, to create structure and the experience of equanimity and integrity.
Related posts:
