Top Ways to Treat Trading as A Business

How To Treat Trading As A Business

Inasmuch as trading is highly profitable, you must treat trading as a business, not like a game of casino (gambling); otherwise, you risk losing most – if not all your money – to the market.

One of the many mistakes traders make is bringing a nonchalant attitude into trading. One of the reasons traders experiences this is because they have an unrealistic expectation of turning a minute amount of money into a huge profit within a short period.

To be a successful trader, you must be ready to treat trading as a business. Treating trading like a business means understanding that your mission as a trader is to maximize profits through revenue. It means respecting the process and putting the necessary work in place like you would for a regular business.

In this article, I have examined the top 5 ways to treat trading as a business and consequently make and retain profits. Let’s get right into it!

Top 5 Ways To Treat Trading As A Business

1.      Make a Good Trading Plan

The primary way to ensure a business thrives is to make a well-seasoned business plan. A business plan aims to check the feasibility of such a business and the implementable strategies that would cause the business to start, scale, and grow.

Similarly, to succeed in the trading world, you need a standard trading plan to help spell out the best time to trade the market, how to, and the strategies you need to ensure consistent profitability and sustainability.

2.      Have a Mission-Vision Statement

Every business, irrespective of size, should have a mission-vision statement. It is the most basic foundational guide to establishing the business’s goals. For example, as a trader, it’s not enough to protect your capital, you also have to grow it, and this is better achieved when you have a mission-vision statement.

A mission statement contains why an entity exists, its vital purpose, characters, values, core functions, and goals. It could be either short on long. With the growth of the entity, the mission statement evolves.

A vision statement states the entity’s direction and where it aims to be – it describes what the company seeks to achieve in the long run.

Having a mission-vision statement as a trader allows you to dedicate appropriate valuable time and resources to trading. It also helps you make informed and intentional actions, therefore achieving your trading goals.

3.      Establish Your Own Accounting\Record System

Another way to treat trading as a business is to keep a diary or establish your accounting or filing system. It implies keeping track of profit, losses, revenues, costs, and every other expense that comes in or goes out while trading.

You must take cognizance of every financial move that you make while trading because it helps you to have a good understanding of your trading stage and consequently make an informed decision. It is also advisable to have a different trading fund. It means that you should separate personal funds from your trading funds.

The following are some of the steps that you can take to establish your accounting or record system:

  • Identify and Analyze Transactions
  • Record Transactions to Journal
  • Post journal information to the ledger
  • Prepare Unadjusted Trial Balance

4.      Have a Competitive Advantage

The core of a business is having your Unique Selling Point (USP), especially in a competitive market. It is also applicable in trading. You can start by being attentive to trading statistics for opportunities such as self and trading improvements, trading skill acquisition, and strategy development.

You can also achieve a competitive advantage over other traders in the market by getting informed ahead of the crowds. It is essential because, like other businesses, education does not end at profitability.

The market is constantly changing, and to avoid being washed away by the tide of advancement and development, you need to evolve with time and keep abreast of the recent development in the trading market. Therefore, continually seek further education and market knowledge because it will help you stay ahead of changes in the market.


You should always treat trading as a business; it should be treated with the same discipline and intentionality as a physical, contemporary business. This approach would help you get the best from your trading, minimize loss, and maximize profitability.

Should you have further questions, drop them in the comment section. I would love to hear from you.

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