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
