The typical retail trader wears a lot of hats, and it’s easy to spend a whole lot of time and energy on so many different areas of your trading business, that aren’t actually about trading. This can be a huge distraction, and take focus away from your primary purpose, which might not be what many people think.
Your job as a trader is not to show off your fancy car or house. It’s not to take selfies in exotic locations to post on your social media. It’s not to hob-knob with the elite in the Hamptons or on a private island. In fact, you really have one very specific job duty – extract money from the markets. Most people are absolutely useless at this job, so if you’re doing it consistently, then you’re a trading rock star. Nothing anyone else thinks about your approach matters, so long as you’re doing that one job over and over again.
That’s not to say there aren’t many sub-routines of this job. Like most job titles, “Trader” implies a lot of things beyond the obvious (making money). Risk management has got to be at the top of the list. You can’t make profit without capital to leverage, so you absolutely cannot – literally and figuratively – afford to lose much money.
But there’s also bookkeeper. Someone has to run your back office, and as an independent “retail” trader that’s likely to be you. Everything from simple P&L reporting, to taxes, to possible compliance matters depending on what and how you trade. There is a lot of “administrivia” that often turns out to be not so trivial after all, when you need it most.
Then there’s IT Support. You have to be able to spec and maintain your computer hardware, operating system, trading platform, and potentially numerous other applications from spreadsheets to email to cloud backup solutions, backup power, possibly a backup internet connection… this list pretty much never seems to end!
And of course there’s the job of Trauma Therapist. Trading can be a mentally and emotionally exhausting game depending on how you trade, and if you are fortunate enough to have someone you can go to in order to vent when you need to, then you’re going to have to be that person to yourself. Especially on those occasions where you suffer a significant loss (and if you haven’t already, you will!), you will need some way to process the experience and not just dwell on it. It just ends up fueling negative reactions like revenge trading, YOLO, etc.
I could probably list at least 2 or 3 other significant roles you’ll have to also take on as an independent trading your own account(s). But the main point I want to make here is not to lose sight of the primary job duty.
You are here to extract money from the markets.
Some days that might mean you extract 5-figures. Other days it might mean keeping your losses to under $100 so you survive to trade another day. But that’s the ultimate name of the game – survive to trade another day. Just keep extracting what you can, don’t let the losses snowball out of control, and do it again, and again, and again. Even small gains add up quickly when they’re consistent. Don’t lose sight of your primary job duty.
Until next time, trade well!
Jonathan van Clute
Community Manager, Trading Research Group