More stock brokers and financial traders are trying to work from home these days. Andrei Knight, a home based trader shares some useful tips for financial traders setting up a home business.
I admit it: the commute is awesome, but whether you are leaving the comforts of your investment firm to strike out on your own, or are a home investor looking to make a go of it on a more full-time basis, there are some practical considerations to take into account, and also some potential pitfalls to avoid when it comes to planning your new home-based trading business.
Tips for Financial Traders Setting Up a Home Business
When you think about it, beyond just the obvious benefit of being in control of your own finances, trading is actually the perfect home business. Aside from an initial investment in computer hardware and the ongoing costs of a good internet connection, there is virtually no overhead. There’s also no staff to pay, no boss, and unlike so many “work from home” opportunities, there’s actually nothing to sell.
Back in the early era of daytrading (the 1980’s), real-time market feeds were prohibitively expensive, and the independent trader was at a severe disadvantage to the big institutions. Today, most brokers will give you not only the trading software, but also a direct connection to the markets at no charge. They make a commission from each trade you place, of course, so it is in their own best interest to give you all the tools that you need.
Your Trading Room
As much as we love our kids, they are probably not going to be the best source of investment advice. If anything, the noise of their play and favorite television programs will prove an expensive distraction, and without fail at the most critical moments. Therefore, if you do not already have a dedicated office in your home, it is time to consider creating one.
A trading room need not necessarily be large, but it does need to be private, preferably with a physical door that you can close. Spare bedrooms work wonderfully for this.
If you presently have a guest room, ask yourself how often it is typically occupied versus how often you might need it for trading or other work. Guests can always spend a night or two on your couch (this has the added benefit of reducing the duration of their stays), or an air mattress can easily be brought in when needed.
If there are no spare rooms available, what about the attic or a walk-in closet? Working in your garage may not be the most appealing option, granted, but is there anything else which can perhaps move into the garage to free up additional working space in your home? For example, your washer and dryer?
Worst-case scenario, you can always put your desk in a smaller closet and sit facing into it with the doors open. Three walls are still better than none.
The idea is to have a designated space for your work in order to create the feeling of going to work. No matter how short the commute, even if it is just down the hall, I have found it is still important to have that commute.
It is a way of refocusing your brain, telling yourself that the next couple hours have a definite purpose. Otherwise it is all too easy to get lost in e-mails, browsing Web sites, and other distractions.
Like any professional office, yours should have designated working hours. Left to our own devices, most of us would watch the charts or read news reports into all hours of the night, very often trading in dangerous, choppy markets with little to no liquidity.
Once you select the main instruments you intend to focus on, do a bit of historical research and find out during which hours of the day they have their biggest moves and the largest amounts of volume. This is when you want to be near your screen, and these hours need not necessarily be consecutive.
Besides the mental separation mentioned previously between focused work with a purpose and just going to your computer to check e-mails or “look something up”, keeping a fixed schedule has one other main advantage: your family will be much more likely to respect your needs for periods of quiet concentration if you also respect their need to spend time with you. This way, everyone is clear on what happens when.
Your family is not a distraction from your work; your family is why you work. Reserving set hours for your activities—and also theirs—is one great way to show them exactly how much you care about them.
Traders come in both sexes so of course these tips for financial traders setting up a home business applies to both moms and dads who are in the financial industry. Good Luck with your home based trading business!
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