Trading and Being Your Own Boss

Unless you work for a firm, trading for a living means that you are your own boss. For some, especially entrepreneurs, this concept is freedom and is part of the reason they are in the market. For others, the idea of being self-employed is frightening because you work without supervision and without the benefit of a structure composed of other individuals; you work alone, and you survive by your own wits. There are benefits and costs, in either case, and I'll front-load the good:

1) You decide your own hours and days

• Enjoy working Monday to Friday like everyone else, with regular hours if you wish. This is great if all of your friends and family operate on this schedule, but not all people have this luxury in this day and age. Many businesses and places of employment operate at either odd hours, on shifts, or 24/7. I've done all these schedules, and while my trading activities have me occasionally trading outside my ideal of Mon-Friday 6am-3pm ish, I trade outside these times when I want rather than when my company tells me that it is required.
  
• Hit and passed your goal and feel like taking the rest of the day or week or month off, you can do so.
• Find that second wind coming on and you are not tired at the end of the session, or you have some deals that are still gaining, you can keep going for as long as you are still effective (but be wary of overtrading of course)
• Find that you are more productive and more profitable at certain times of the day, well you can work those times.

2) You work as hard or as soft as you want

• Part of working for yourself is having the right to work at your own pace, as opposed to working at your boss' pace. For some this might mean more slacking off, but for others it means working harder and more effectively. Personally I've noticed my own work ethic improved dramatically when I started to take my trading seriously and treat it as a full-time job rather than a part-time hobby.
• You are able to balance life and work easier, with some care and planning. At some workplaces, your social networking is seriously curtailed, i.e. no facebook, or personal emails, or phone calls. If you trade for yourself, you can do all the above on your own time, provided you keep track of your work while you're doing it.
• Get it done when it needs to be done, rather than waiting for approval from up above. When I worked in technical support, there was often the problem of upper management questioning what middle management was doing, and on down the line. Often those in the middle and on the bottom are on the ground so to speak, and if they care about what they do, they will usually know what needs to be done to fix a problem for either the company or a client, but would end up with a solution on hold until approval came from above. Precious time was wasted and productive hours were lost when there was a serious lag in communication. As a trader, you have an idea as to what needs to be done within seconds or minutes of a critical decision moment, and the only approval you need come from your strategies, your rules, your equity, and sometimes your gut.

3) You enjoy the full fruits of your labour

• Because you are working for yourself, your profits and losses are yours rather than shared with your company. In many places of employment, often the most productive people carry the rest of the department or organization. In my understanding, this is true downside to communism (which operates on the principal that the all humans are pretty much the same and that the human spirit can be forged to follow a universal set of ideals) and improperly managed corporate structures. Taking realistic human nature into the equation, when everyone in society, an occupation, or a position is paid the same regardless of effort or results, the end result is usually the lowest common denominator of productivity; in other words, why should I work harder and more effectively for the same pay as the slob who only makes the effort of appearing to work hard when he/she is being monitored by a superior?

4) Job security

• No need to worry about downsizing, off-shoring, or closures.
• You are not likely to replace or transfer yourself due to workplace politics or business needs.
• In fact not having to deal with workplace politics really is a complete benefit in and of itself.
  

While the positive aspects seem logical, there are cons to being an independent trader:

1) You need to provide your own work ethic and motivation

• Don't quite feel like trading, but you have yet to reach this week's or last week's goal, you may need to suck it up and start looking for opportunities and deals.
• This doesn't mean trade when there are no opportunities, but you do need to put in a certain amount of time and effort to achieve anything of value (well other than winning the lottery or having a rich uncle that favours you in their will), and this includes being a successful trader.
• This is a profession like no other, but it is still a profession.

2) You need self-analyze your productivity

• Something that many employees either dread or look forward to is the monthly/yearly review, and as a trader you should be tracking your progress.
  
• You will be doing this for yourself, taking extra time out of your day when you are not trading.
  
• This might actually is a benefit for people that are able to objectively criticize themselves and either work around their weaknesses, or overcome them. For others, I recommend learning to do these things very quickly.
  

3) You are responsible for your bottom line

• As an employee, if the company is not profitable one month, you still get your bi-monthly pay, and you will most likely not need to worry about your pay and benefits over the long term. With trading, you are earning money based on the consistent success of your performance.
• If your bottom line dips, or goes in the red, you need to figure things out pretty fast.
• You take care of your own overhead, i.e. paying your rent, power, keep your credit clean and open, pay your Internet connection, and for some traders pay for news/chart feeds, which means your overhead needs to be taken care of in a timely manner or you will not be able to work and earn money.
  
• You are also responsible for maintaining sufficient capital to continue operating your business and your life, even when you are off your game. For most traders, this means planning ahead or having a future-time-orientation, and keeping sufficient savings on hand as case money. Having as much liquid capital as you can amass is key here.
  

4) In many cases, trading is a solitary activity

• Many traders trade by themselves (I do) and sometimes I do miss the back-and-forth with coworkers, having lunch with the gang, the camaraderie of sharing work, being part of a team, and of course the never-ending string of jokes and pranks that I used to enjoy at every half-decent place I've worked.
  
• On the other hand, you can always see your friends and enjoy that time much more when your are not supposed to be working.

All of this comes into focus when you realize that as a self-employed trader, half of your business is to analyze the market and take calculated risks to generate profit on a regular basis, the other half is to analyze yourself before, during and after your trading activities. I find that I will usually devote an hour to a couple of hours on the weekend to serious self-analysis regarding my trade activities, but I usually do as much as I can away from my office so that I can have a fresh and hopefully obejective perspective. Excellent self-management of your trading can make the difference between consistent success and erratic results, so it is worth your time and effort.