Louise Bedford on why corporate professionals excel as traders.

If you’re a corporate professional looking to trade the markets effectively and profitably alongside your corporate role, what follows could be the most important information you will ever read. Please let me explain.

I’ve been trading and training others to excel as sharetraders for twenty years. In that time I’ve noticed one particular trend. More and more corporate professionals are focusing on safeguarding their futures by developing multiple sources of income. Even those in upper management are realising they need to have a back-up plan. I’m so glad I did. If I hadn’t learned how to trade alongside my upper management corporate role, before I experienced devastating ill health, my financial future would have been crippled.

Professionals share a lot of characteristics with traders playing at the top of their game. Unparalleled time management skills, focus, determination, and juggling priorities are all second nature to them. And it’s exactly these qualities that top traders use day by day.

More and more top-level executives are finding that trading profitably grants them the ability to say ‘no’. ‘No’ to an unwanted overseas transfer. ‘No’ to missing out on another football match with the kids due to work commitments. ‘No’ to any company-based initiative that doesn’t fit with their personal goals and focus.

You may be wondering ‘But isn't trading hard to do, when I’ve got so many other priorities at work?’ I do hear where you’re coming from: however, there are trading systems that rely on weekly data and take 30 minutes of your attention on a weekend, and just a small amount of order processing time on a Monday. There are executives working 80 hours a week who find time for that, and so could you. The key is knowledge.

The longer I’ve been trading, the more I’ve come to realise there are three critical components to a trader’s success. First, you need to have an excellent trading system. Without a trading system that suits your lifestyle, you’ll end up behind the eight ball and you’ll never achieve the additional income source you crave. Second, you need top-notch tools, education and support. Without these, you’re destined to be a mediocre achiever in the markets, and likely to quit before you achieve success. Finally, you need to focus on your mindset. Novice traders totally underestimate the importance of self-development in this area.

I know what it's like. Your life is a hustling series of critical decisions, with financial targets to hit and meetings to focus on; and everything relies on your juggling all of these every day. I understand that. I realise that in your position you need to be proactive and maintain clarity.

But, you've got to ask yourself – if you can't find the time today to learn about the share market and develop your skills, when will you? Let’s look at some trading professionals who have given the corporate world the flick and are now trading for a living.

Case Study One – Tony Raikes

Tony is a qualified accountant, who enrolled in my Mentor Program and began trading part time. Tony says: “During this time of consulting and trading, I realised that with less effort I could be more successful trading. I decided to begin trading full time, and to date I've made a reasonable living doing so.”

One of the keys to Tony’s success is that he applies the skills he learned in the corporate world to his role as a full-time trader. Tony says: “The organisations where I worked were very big on performance management and measurement. I needed to know that what I was doing was working, and that I was able to support my family with a trading income.” Tony knows how important it is to have an effective written trading plan. “It’s essential to have a business plan if you are going to make a living from trading. It is so important to map out and write down a detailed trading plan. I have also written a life plan... but I'm not sure if that is overkill!”

Tony confides that the social isolation he experiences as a trader “has been the biggest adjustment for me, although it has been a gradual change. I'm a people person, and I'd be lying if I said at times I didn't feeling like giving it up because of this.”

A strong support network of traders is essential to your success. So before you give your job the flick, make sure you’ve considered these issues.

Case Study Two – Dean Walton

Coincidentally, Dean is also an accountant. Dean trades equities and indices full time from his home in Melbourne. Focussed on his own education, he is looking to develop his skills in FX and commodities. Dean tells me that one of his biggest hurdles was “telling my family and my wife’s family that I was now going to trade full time. It is fair to say most people think I am mad! They clearly don’t understand what it is that we do, and how trading can provide a terrific income.”

Dean says: “Getting my psyche right in terms of trusting the system and being able to execute when I need to has been essential. Accepting that mistakes will happen, learning from them and moving on is the only way to be successful in this game.”

People generally quit their job prematurely to become full-time traders. There are no guarantees in this game. Even though trading for a living offers unparalleled freedom, make sure you have developed the necessary skills before telling your employers that they are no longer required.

Hard times?

There are times in the market when it’s relatively easy to spot a trend, to find an appropriate instrument to use, and to make a profit. However, there are other times when the market is a volatile beast, where neither your long trades nor your short trades will make you money.

As a trader, you have to recognise the warning signs, and act accordingly. Sometimes it’s better, even when you’re trading full time, just to go on a bit of a holiday, rather than keep on pitching yourself at a market that isn’t rewarding your efforts. It can seem you’re in a ‘tread-water holding pattern’, just waiting for the right opportunity to appear. It takes a brave (and wise) trader to say: “That’s OK. I’m doing what it takes.”

You can learn how to trade as a full-time occupation or alongside your other activities, wherever and however you like. Develop the skills to trade effectively and no one can ever take them away from you. Even the ban on short selling last year, when regulators around the world stuck their beaks into our home turf, didn't create a ripple. Educated traders shifted to shorting indices, where there were no restrictions.

If you are reading this article and have subscribed to YTE you've already started your journey towards freedom and security. You know that alone, you are vulnerable. But with a bit of help you can achieve greatness – and you have our full support!

Ask yourself a few pertinent questions before deciding to quit your job:

• Have you honed the necessary skills to make money regardless of market conditions – if the market is going down or sideways, does your income suffer? If you don’t know how to short sell, and trade options and warrants, in addition to shares, then you will make money only in a bull market, which is not sustainable.
• Do you have sufficient capital to continue trading, even if you suffer a string of losses? Can you build your capital, and increase your position size, based on your trading results? If you cannot add to your equity, inflation will ultimately bite you. Many traders begin their full-time trading career insufficiently capitalised.
• Do you have the discipline to follow a stop loss and to exit a trade when it has turned against you? If you don’t, you will eventually self-destruct.
• Have you been able to bank your primary source of income for at least a year, and live solely on the income derived through trading? If not, the pressure of trading for a living when you do quit your job may adversely affect your trading decisions.
• Do you have the support of your family? If you are responsible for the lives of others, it is essential that you have their buy-in to your goals. Many partners will inadvertently sabotage their loved ones’ plans if they do not share a common vision.

Louise Bedford is Australia’s best-selling author of books on the share market. Her titles include – ‘Charting Secrets’, ‘Trading Secrets’, ‘The Secret of Writing Options’, and ‘The Secret of Candlestick Charting’. Visit www.tradingprofessionals.com.au.

This article was originally published in the Jul/Aug 2010 issue of YourTradingEdge magazine. All rights reserved. © Copyright 2011, Your Media Edge Pty Ltd. 
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