is trading less riskier then starting a business?

[hanzahar]

everyone knows 90% of traders loose money (maybe not in stocks and equities)

surprisingly 90% of business (small) fail within 5 years.

if you are not an employee type of person which path will your pursue and have better chances of success? (anyway what is success in trading anyway since there is no guarantee of a profit for the next trade)

trading or business... other businesses e.g restaurant,motel etc.

 

[smallStops]

I would say trading before one gets it is far more riskier and more difficult because one needs to work on their psychological flaws as well, whereas in business one needs to work more on their processes.
But after one gets it much safer and easier than business, as even established business can close down.

Both endeavours require to make it easier:
- person to be really passionate about what they want to do.
I would guess one who is more keen on food, would be better off in a restaurant business than say personal fitness business, etc...
- massive and superior training in every area required.
- clear plan and understanding that they might have to work really hard for 10 years at it, with no guarrantee. Hence it is best to really love the activity.

 

[hanzahar]

Quote from smallStops:

I would say trading before one gets it is far more riskier and more difficult because one needs to work on their psychological flaws as well, whereas in business one needs to work more on their processes.
But after one gets it much safer and easier than business, as even established business can close down.

Both endeavours require to make it easier:
- person to be really passionate about what they want to do.
I would guess one who is more keen on food, would be better off in a restaurant business than say personal fitness business, etc...
- massive and superior training in every area required.
- clear plan and understanding that they might have to work really hard for 10 years at it, with no guarrantee. Hence it is best to really love the activity.

thank you for your opinion

are you saying you need 10 years to "master" in trading?

is it better to join a prop firm or self study for starters?

I know I've registered in 2006 but I didn't take trading seriously and I am not sure which market will be easier and gives me better chances of succeeding

some say stocks is the easiest and options the hardest.

forex and futures are for the pros.

 

[smallStops]

Basically all depends on the skills you have before trading or setting a business.
For instance, a family hotel owner who had in the past spent travelling and "volunteering" at guest houses, will have skills that might make him more successful in less than 10 years. It is all about the skillsets one needs to develop to reach a given goal. And many times, one does not even know what skillsets need to be developed.
But I would guess that being intensively into an endeavour for 10 years will allow the person to find out all the skills that need to be developed.

 

[EvOTraderV2]

Firstly, trading is a business.

Secondly, the failure rate is similar.

Third, the question is highly subjective and I'm not really sure what you are asking.

If you are asking if you are more likely to lose your money in the markets than opening a bodega on the corner, the answer is possibly. It depends on many factors. A lot of brick & mortar type businesses have highly fixed costs of rents, salaries, etc... As a trade, your costs are generated by volume so if you can't make $$ on 100 shares, you won't be able to on 10,000 shares.

If you are intelligent and keep your emotions in check, it is possible to limit your downside risk while in the learning process. I wouldn't recommend you do it alone though. Find a prop firm or a trading academy which can help you beat the learning curve. They won't be able to make you profitable but they will be able to teach you how to manage your risk more effectively and how markets worse - especially relevant if you aren't experience with intraday markets.

 

[hanzahar]

Quote from EvOTraderV2:

Firstly, trading is a business.

Secondly, the failure rate is similar.

Third, the question is highly subjective and I'm not really sure what you are asking.

If you are asking if you are more likely to lose your money in the markets than opening a bodega on the corner, the answer is possibly. It depends on many factors. A lot of brick & mortar type businesses have highly fixed costs of rents, salaries, etc... As a trade, your costs are generated by volume so if you can't make $$ on 100 shares, you won't be able to on 10,000 shares.

If you are intelligent and keep your emotions in check, it is possible to limit your downside risk while in the learning process. I wouldn't recommend you do it alone though. Find a prop firm or a trading academy which can help you beat the learning curve. They won't be able to make you profitable but they will be able to teach you how to manage your risk more effectively and how markets worse - especially relevant if you aren't experience with intraday markets.

thank you,yea as I understand day trading is harder then swing trading...

 

[newwurldmn]

Trading is far riskier than an operating business.

There's a reason a bank won't give a loan to a trader to start his "business" but will give a loan to an entreprenuer whose trying to start a small business.

Trading is also a far less sustainable "business" than an operating business. Alpha vanishes long before you realize it does. There's a reason why so many trading firms/hedgefunds that are well established go bankrupt within weeks. An operating firm of the same size would take years (giving management potentially enough time to correct the problems)

 

[hanzahar]

Quote from newwurldmn:

Trading is far riskier than an operating business.

There's a reason a bank won't give a loan to a trader to start his "business" but will give a loan to an entreprenuer whose trying to start a small business.

Trading is also a far less sustainable "business" than an operating business. Alpha vanishes long before you realize it does. There's a reason why so many trading firms/hedgefunds that are well established go bankrupt within weeks. An operating firm of the same size would take years (giving management potentially enough time to correct the problems)

makes sense...

thanks

so don't trade just go long and invest in ETF?

 

[newwurldmn]

Quote from hanzahar:

makes sense...

thanks

so don't trade just go long and invest in ETF?

Investing in an ETF (index fund) vs actively trading is a different topic all together.

 

[hanzahar]

Quote from newwurldmn:

Investing in an ETF (index fund) vs actively trading is a different topic all together.

if starting a business is less riskier then day trading... why people day trade? because people assume they have better chances of succeeding and it is easier? (low cost)