What Are You Worth As A Trader?
Today’s message can be extremely valuable, if you’ll take just a few minutes for a very simple exercise.
The purpose here is to simply raise your awareness, so that you can take action to improve matters if you find that it would turn things in a more desirable direction.
Do NOT be offended - that is not the intent!
So the question today is very simple:
As a trader, what is your hourly rate of pay?
Have you even taken the time to at least get a rough estimate?
It’s very simple to calculate:
Take the average number of hours per week that you devote to your trading X 4.33
Now take the average net profit for your last 3 months trading.
Divide the profit by the hours worked.
This is your hourly pay as a trader.
So……
What do you think?
Is your rate of pay is substantially below where you want it to be?
If so, then perhaps a change of strategy - in how you approach your trading business - might help that tremendously.
Too many people in business pursuits of all sorts, let alone trading, never bother to take a look to see if they are being properly paid for all their efforts.
Often the trouble is the point of focus - spending time, energy and attention on the wrong things - but not that the current matter isn’t worthwhile. It is simply the mental approach to the activity as a whole.
Here are a few examples:
One trader I know in Kansas spends an inordinate amount of time trying to tweak his system because he just KNOWS that he can find a way to beat the markets. He spends almost no time focusing on his organization, emotional control (or the sources of his emotions), so when he goes to trade, his execution is dreadful and he doesn’t capitalize on his system efforts.
Another trader in Quebec reads probably 3 books a week, but doesn’t apply what he learns from the books. He is making the mistake of thinking that knowledge is the answer in and of itself. Knowledge put into action is power.
In New Zealand, we’ve got one guy that has run his trading into the ground and is about to ruin his life. He has lost his life savings and has been trading on his credit cards trying to make it all back, sure that he’s “this close”. And he hasn’t even told his wife about it. Nor is he even considering stopping. He just keeps trading away, thinking that staying active is the answer.
Okay that last one is a doosie, but the point is that these people are very busy investing their time but at less than minimum-wage.
When these people looked at their hourly pay as a trader, it was a major wake-up call for them.
Most people get into trading to find FREEDOM and a better living, not working for less than their day jobs.
This is but one of the many aspects of trading that is worthwhile to explore and act upon.
If your pay as a trader is lower than you’d like, that doesn’t mean that it is necessarily bad.
A brand new trader isn’t likely to have a high hourly rate. They are still learning the ropes.
For someone that has been trading for more than a year, however, the rate of pay should be at an acceptable level. If it isn’t, then perhaps the approach to the business of trading is what needs to be attended to.
As with any true profession, education is critical to success. Make sure that you educate yourself and apply what you learn.
I hope you’ve found this helpful.
Cheers
Brian
P.S. For a different perspective on how to approach your trading, go to:
http://insideouttrading.com/pit/
You can pick up a free copy of the 30-page report, “Traits of the Top 10%” while you’re there
What’s Missing From The Headlines???
With the events of last week, you are probably feeling
at least some of the same panic that is prevalent all
over the world, and that’s understandable.
A monumental shift of wealth is taking place and that
can be a scary thing. The rules of the game are being
changed and it is going to have far-reaching effects.
Our government leaders are acting hastily and laws are
being passed without proper due diligence (IMHO) and
the RTC II is going to profoundly change the investing
landscape, but for a reason that hasn’t yet made the
headlines:
The talk has mostly been about the conversion of some
of the large investment firms to banks and all the
“bad paper” that is at the root of the problem.
I find it interesting that such significant events
would all happen in such a short period of time, just
when the U.S. is also freaking out about gas prices
and availability.
It just seems very opportune for Bank of America and
Morgan Chase to be buying up all these huge firms for
pennies on the dollar - and ’saving’ them by acquiring
all these bad sub-prime loans.
What seems to be missing from the headlines is that
each of these loans also has a mortgage attached to it,
meaning that the companies are acquiring rights to an
incredible amount of real estate as the loans default.
It seems to be escaping everyone’s attention that
tens of thousands of properties are being acquired for
peanuts.
Now the other effect this will have is the flood of
devalued properties being dumped on the market, thus
furthering the downward spiral that most are now
calling the ‘real estate bubble’.
Unless our leaders slow down and think through their
legislative actions, the game is going to continue to
get changed at a dangerously fast pace - and the middle
class Americans are going to be affected the most, along
with the rest of the world.
This message is meant to alarm you a little bit, only
to keep your eyes open to what is going on but not yet
making the headlines.
In any changing environment such as this, there is great
potential for loss but also for opportunity for those
that prepare and act knowingly and with a calculated risk.
The storm is far from over and with the markets being as
wildly volatile as they can be in such circumstances,
systems that work under “normal conditions” may not be
reliable now.
A word of advice for you: protect yourself!
If you can NOT trade confidently in this tumultuous
environment, strongly consider staying on the sidelines
until the dust settles.
Do NOT simply chase profits right now.
I’m just trying to look out for you.
Cheers
Brian
Do You Own Your Trading, Or Does It Own You?
It is so easy as a trader to get consumed.
- Consumed by wanting to hit the big winners.
- Consumed by the fear of losing money.
- Consumed by wanting to beat the markets.
- Consumed by wanting to be validated by being right in our choices.
It is so easy to become so consumed that we become owned by our trading, instead of owning it. But this is NOT what you became a trader for, is it? You became a trader to have a better life, right? Sure, you want the money, but so that you can live the way you want, with freedom.
Most are feeling frustrated with their situation because it is the opposite of why they started trading in the first place.
Because of this, I get questions regularly about the psychology of trading and these are good questions for sure.
One of my favorites is “What is the right mindset to have?”
Well to me, a mindset is a collection of perspectives. How you view or see a thing. Some refer to this approach as perceptual psychology: what you think about something and how you feel about it are determined by how you perceive it.
Now I also subscribe to other schools of thought, such as cognitive psychology and behavioral, but when we’re talking about “mindset”, that’s perceptual - and in trading it is extremely powerful.
For insights into the mindset of the favored 10% of individual traders that own their trading instead of the other way around, I invite you to go to the page linked to below.
http://insideouttrading.com/pit/top10.html
Whether you act on the offering there or not, you WILL discover some truths about trading that give you empowering perspectives that are the part of the healthy mindset.
Take back your ownership. It starts with your mindset.
http://insideouttrading.com/pit/top10.html
Cheers
Brian
P.S. If you haven’t already grabbed your FREE copy of the newly
updated report, “Traits of the Top 10%”, you can do so here,
Trading versus Any Other Business…
The common wisdom is to treat your trading as a business.
Why should you?
Before you chose to become a trader, you were a person with money to invest.
You could have chosen to invest your money in quite a few different businesses.
Would you have fared any better in any of those?
Would you have had better chances of success?
In this video, I explore these questions.
It’s amazing what the similarities are - and this is an advantage for you…
- if you’ll capitalize on it.
Cheers
Brian
P.S. Have you downloaded your FREE copy of the newly updated 30-page report, Traits of the Top 10%?
Get it now! http://insideouttrading.com/
Is Self-Sabotage A Survival Mechanism?
Self-sabotage is often experienced in trading and it can be very difficult to keep it from happening, especially if you don’t understand why.
Most times when you think of self-sabotage, what comes to mind are those lottery winners where they lose all their winnings and wind up broke in a relatively short period of time following getting rich.
Traders also experience it when they find sudden success and are hitting it big pretty quickly.
Now the common perception of self-sabotage is that it is a corrective measure by the subconscious to align your circumstances with your self-image.
If subconsciously you make 50,000 a year and all of a sudden you’re making 100,000, then you’ll sabotage yourself to get back to 50,000.
But what about when you find yourself being sabotaged and you’re not hitting it big?
How about if you’re actually losing money?
Why does it happen then?
To find out, watch this video where I share the results of an experiment that a friend of mine ran.
To further your understanding even more, go to:
http://insideouttrading.com/pit/approach.html
You may discover some answers that have eluded you until now.
Cheers
Brian