Real Estate
Are you trading to your strengths?

Are you trading to your strengths?

In your trading, are you playing to your strengths or just being an “opportunity seeker”?

There is a big difference between the two and if you are just an opportunity seeker then you set yourself up for frustration and loss.

There are many parallels between trading, business, and gambling, and your ultimate long-term success will be determined by how you approach any one of the three. Playing to your strengths is critical in all three.

In any of the activities, there is competition and you always want to make sure that you are playing to your strengths and not your weaknesses.

The goal is to win, that is to profit, and you want all the advantages you can get.

Too often, the Opportunity Seeker will look for an opportunity just because they see there is money to be made and believe they can strengthen their weaknesses (learn more) enough to get that money.

Let’s take a brief look at how this applies to each area, noting the parallels between them.

In business, long-term successes are built by those who have an end goal in mind, a vision of what the business will look like when it’s mature.

This is critical because the company must stay on a course that is consistent with its vision as it grows. Distractions and deviations from the path only serve to slow you down or even set you back.

Successful business leaders know when to seize an opportunity and when to say “no.” Saying “no” is critical to keeping the company’s activities (time investments) focused where there are competitive advantages and avoiding those where the company is at a disadvantage.

In games of chance, the poker player will stay at the Blackjack table and win their money there. You won’t jump and run to the roulette table just because you heard someone won $50,000 there. He knows what he’s good at and will only venture to other tables to be entertained, not to make money.

In Trading, let’s say you invest for the sake of argument, a good real estate investor who knows how to make $1 million a year will not necessarily do well in trading. They are completely different games.

Just because a person knows how to buy property properly, increase its value through rehab, or raise rents, doesn’t mean they will have the talent or skills to make money in the futures or forex markets.

Even an experienced trader should be hesitant to jump from one game to another. A buy-and-hold position trader should exercise great caution before jumping into day trading, and a better margin should hone their skills before thinking of buying (or selling) outright futures contracts.

Each strategy (or game, let’s say) has different skills associated with it and different emotional requirements.

The other serious consideration is your level of competition, period. This combined with your ability to spend time trading.

If you are completely new to trading or have not yet mastered the necessary skills to trade, you should definitely seek help.

The learning curve can be very expensive in trading, and if you don’t have the time or plan to become proficient, how do you expect to make regular profits from it?

If you don’t have the competition, the strengths to be a good trader, or the time and resources to become one, you may want to consider other options available to you.

If you don’t have the skills or the time to develop them, but want to take advantage of the good money that can be made from trading, you may want to consider a managed account. Why settle for an amateur trading your money (YOU), when you can have a professional do it for you?

However, please do your due diligence first! Ask for the history and the plan to follow.

Your next option if you are “starting from scratch” is to trade with the help of an experienced broker.

That’s what they are there for. Of course, you can find very low commission brokers to deal with, but you can get exactly what you pay for. A good broker can be found for a round trip commission of $50-$100, and they will give you the best possible advice.

In the long run, you’ll probably do much better if you follow their advice!

Again, ask for their history and check with the NFA to see if they have any complaints.

It would not hurt to see if the broker you are considering is recognized within the trading community as good.

Many very good brokers publish regular articles or advice columns on respected websites and in established periodicals.

Generally, if you see that the person has been posted for a period of years, then that’s a good sign.

Crackpots and charlatans jump around too much and aren’t allowed to stay in one place for long before their reputation catches up with them.

Until you have the strengths yourself, borrow them from someone who does while you are developing.

When you have the competence, skills, and resources, only then should you venture out on your own. And that’s only if you’re so inclined to become a trader and do it all yourself.

If your real goal is to make money, play smart. Make use of other people’s knowledge and skills until you have developed your own.

Of course, if you really don’t want to spend the time being a full-time or very active trader, but still want to make trading part of your income portfolio, consider your other options.

Whatever you do, don’t just chase another “opportunity” to make money if it doesn’t play to your strengths.

For trading, those strengths should be discipline, emotional control, coachability, ability to focus, follow through, decisiveness, understanding probabilities, handling uncertainty, and many others.

There are activities to have fun and others to earn money.

Trading can be both, but if you don’t take it seriously, with an honest review of your own characteristics and desires, then it can end up being neither. In any endeavor where money is the bottom line, enlist the help of a trusted friend. Remember, a good mentor is there to show you the right steps to take and the ones to avoid.

Copyright 2006 New Ireland Ventures, LLC

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