Trading vs. business

R

Robertwiz

Hello,

I am a 31 year old man that is at the crossroads of deciding which path to take to build my fortune. I am extremely interested in trading as well as traditional business/entrepreneurship. My questions are the following:

1. In your opinion, what are the advantages and disadvantages of trading vs. traditional business?


2. What are the differences in the abilities required to be a successful trader vs. the ability to be a successful entrepreneur?

3. Have any successful traders moved on to become successful entrepreneurs and vice versa?

Any thoughts would be greatly appreciated.


Thanks,

Robert
 
I have to say go for trading. I've been very successful at it. But, it isn't for the faint of heart. You cannot go wrong either way, trading or starting a business. But, both would mean you working very hard to make it happen.
 
In your opinion, what are the advantages and disadvantages of trading vs. traditional business?

If you're telling the IRS that you're a full-time trader...there really isn't any difference from a traditional business assuming you meant that traditional is some person owning his own business.

What are the differences in the abilities required to be a successful trader vs. the ability to be a successful entrepreneur?

Same qualities are needed. Thus, no differences.

Have any successful traders moved on to become successful entrepreneurs and vice versa?

Yes some are able and others are not able to.

Mark
 
Nice thread.

In your opinion, what are the advantages and disadvantages of trading vs. traditional business?
advantages:
1. does not require communication/networking skills while most traditional biz do
2. there are a lot of side-jobs related to trading like risk manager etc. which you can pick up with some education
disadvantages:
there is a hell lot of spam and misinformation in trading compared to traditional biz
Have any successful traders moved on to become successful entrepreneurs and vice versa?
I have seen entrepreneurs from other domain making it big in trading but not vice-versa.
 
Quote from Robertwiz:

Hello,

I am a 31 year old man that is at the crossroads of deciding which path to take to build my fortune. I am extremely interested in trading as well as traditional business/entrepreneurship. My questions are the following:

1. In your opinion, what are the advantages and disadvantages of trading vs. traditional business?


2. What are the differences in the abilities required to be a successful trader vs. the ability to be a successful entrepreneur?

3. Have any successful traders moved on to become successful entrepreneurs and vice versa?

Any thoughts would be greatly appreciated.


Thanks,

Robert
More...

There is no significant difference between a traditional business and a trading business.

Forget turning your $50k account into $1b. You might as well buy lottery tickets, you'll get there faster.

If you want a reasonable chance to get rich ($50M+ of net worth) in the trading industry, you need to consider trading as a traditional business.
You need customers and employees, just like in any other business. You can't do much by yourself.

Ninna
 
One advantage of a traditional business vs trading is you can lose money for years and remain in business. Not much in the way of cash flow in trading.

With a traditional business, people expect you to show up for work and do something. Don't expect an e mail or phone call from your broker on why you're not trading today, nobody cares.
 
Quote from trader#21:

Nice thread.

In your opinion, what are the advantages and disadvantages of trading vs. traditional business?
advantages:
1. does not require communication/networking skills while most traditional biz do
2. there are a lot of side-jobs related to trading like risk manager etc. which you can pick up with some education
disadvantages:
there is a hell lot of spam and misinformation in trading compared to traditional biz
Have any successful traders moved on to become successful entrepreneurs and vice versa?
I have seen entrepreneurs from other domain making it big in trading but not vice-versa.
More...

I strongly disagree with your #1 considering there are things like discussion forums, free chat rooms and other social networks (myspace, facebook, twitter) being used every day to communicate or network.

Thus, there's an obvious need just like any other business has a need for such to improve or learn more about the competion (e.g. conventions).

I also disagree with that traders are not making it nicely in other businesses after changing careers. However, these traders were ex-professionals (e.g. former floor trader, former institutional trader) instead of retail trader.

Regardless, the thread starter didn't clarify his definition of "traditional business". Hopefully he's not trying to compare apples to oranges via comparing a "retail trader" to a "corporation" when the comparison should be more like "retail trader versus entrepreneur" or "institutional trading firm versus traditional corporation".

Mark
 
Trading is a business, no doubt. But all the successful traders I know are traders because it is a burning desire within them to do it. They got into it because it was a calling and they almost couldn't NOT do it. It's like saying "should I open a Subway, or be a professional guitar player"? One is a rational decision based on dollars and cents, the other is something you pursue because of your love for it. If you're really good at it, you'll make good money. But it's probably not the kind of thing you can force.
 
Quote from lescor:

Trading is a business, no doubt. But all the successful traders I know are traders because it is a burning desire within them to do it. They got into it because it was a calling and they almost couldn't NOT do it. It's like saying "should I open a Subway, or be a professional guitar player"? One is a rational decision based on dollars and cents, the other is something you pursue because of your love for it. If you're really good at it, you'll make good money. But it's probably not the kind of thing you can force.
More...

There is some truth in this, but I think you missed the big picture.

If you're good a spotting, hiring and keeping people that are really good at it, you''ll make good money. ;)

Ninna
 
trading is a '9-5' job - pick your hours - and location
day in day out you work alone without any face-to-face interaction/communication
with any others
very profitable trading can be done day-to-days which means very little monitor time
specific imo, manual buying and selling skills are related to trading only so one has
to have them already or learn them - how long's a piece of string
one can progress to trade other people's money, either as individuals or in a fund
one can start trading with as little capital as $1 - fx

if one has the capital to purchase a successful franchise such as a McDonald's then
one's fairly well assured of profits, one's function is 'manager'
selling a product or service is generally associated with a 'love' of 'it', or it's a hobby
say that expands into a business
working hours are determined by the business not just the hours the business is
open; wife may keep the books, you do all the janitorial, service the vehicles etc

"'Dragon's Den' is a very popular series of reality television programs featuring
entrepreneurs pitching their business ideas in order to secure investment finance
from a panel of venture capitalists." http://en.wikipedia.org/wiki/Dragons'_Den
this show is very interesting as it covers many aspects of starting/owning/running
a business. happened to watch the season wrap-up yesterday; two businesses
got booming sales after their appearance on the show; one startup which received
funds from 3 of the 'sharks' had the funds cheque torn up in their faces because
a previously unknown director insulted one of the sharks in particular, is the deal
dead ? tune in next season - Canada

i only trade fx and futures, an example:
trade 1 lot or futures contract, eurusd/6E or ES or etc
trade for 10 pips/ticks = $100/$125 x 21 days/mth = $2,100/$2,625 per month
trade 10 lots/contracts = $21,000/$26,250 per month - $252,000/$315,000 annual
during June the average daily range of the eurusd/6E was 146 pips

'Losing motivation - the daily grind': http://www.elitetrader.com/vb/showthread.php?s=&threadid=125117
 
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