Friday, October 22, 2010

Why Trade?

I suppose there are a lot of answers to the question: Why Trade? Naturally, all of us have at least one answer in common and that is we trade to make money. That is the bottom line, isn't it? One of the things I like about trading is that it provides a great number of ways through various methods and strategies to add streams of income to our lives. I wrote about a number of them in my second book, "Smart Investors Money Machine." Most of us could stand an extra income stream or two or three, and for those who are willing to undertake the initial learning curve, trading can be an important way to fulfill that need or desire.

I have found, however, that trading can be much more than just a source of money. It can lead to freedoms that many, if not most, do not have. For example, I am writing this on the beautiful island of Kauai, a place far from home that I enjoy immensely. Even here, on the remotest spot on earth, I can trade. I am not restricted by geography in making my living. As long as I have an internet connection I can go to work and that, indeed, is a freedom I cherish.

In the early years after school, I was an employee and that meant I was beholden to and under the control of someone else at least during my working hours. Someone else decided when and where I would work and what I would do and when I would do it. As a trader for my own accounts, that is no longer the case and that is a wonderful freedom.

As I grew older, I became an employer myself and that status carried additional responsibilities with it. Directing employees, setting schedules, handling absences and vacations, paying salaries and benefits, at times paying employees when I couldn't pay myself, preparing and filing seemingly endless forms for federal, state, and local governments and their taxes and other bureaucratic demands all took time and restricted freedoms. Trading for a living removed those restrictions. I no longer need to work for my employees because I have none. Of course, I still have obligations to the governments to pay taxes and file those forms but the nature and extent of those requirements is much less burdensome and intrusive. Again, I am blessed with more freedom.

Trading has allowed more time with family and friends. It has enabled me to do more volunteer work and to help others. I don't mean to suggest it is the be all and end all for everyone, but I do mean to say that for those who are both drawn to it and who have a passion for it, it can provide a great quality of life. Of course, trading involves risk. It can involve a lot of risk, but when we think about it, doesn't everything?

I once owned a retail business. That was a form of trading where goods and services were traded for money. Retail is tough. The risks are enormous. Customers, competition, location, advertising, employees, licenses, insurance are just some of the issues the retail business person faces. The freedoms are few since the business owner is tied to the business both geographically and in terms of the consumption of time. The same is true with many other fields.

I have chosen freedom through trading and it is a passion. It is far from perfect but for me over more than a decade now it has provided an amazing quality of life. Make no mistake, it does require work, study, and devotion. The risks can be high, but so, too, can be the rewards.

by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
All Rights Reserved

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Anonymous said...

HI Bill

I live on Kauai

where are you?

Bill Kraft, said...

Anonymous on Kauai. HBR in Princeville. Please feel free to give me a call over the weekend.
Bill Kraft

Anonymous said...

Thank you for this letter Bill. I reflect often about the freedom from trading and providing a work place for others. Does the volunteer work help to quite being able to offer a work place and not doing it?

Bill Kraft, said...

Sorry, Anonymous, I don't quite understand your question.
Bill Kraft

Unknown said...

Hi Bill,
I read your articles every week.
I have read both the books except Trading For Keeps:.
I'm interested in option and doing it on a part time basis for the past 3 to 4 years. But I want to consistently do it so that I can achieve it as full time.
One thing I'm not able to pick up pointers from your book is that too much information.
I admire your dedication and hard work in you trading success.
Is there any advice that you can put across for me to to pick up my trading to the next level.

Happy Trading.

Word Wielders said...

Well said, Bill. I, too, am a trader. I wouldn't give up the freedom I have to be at home with my family for any job in the world. My wife and I are also writers, editors and transcribers. Trading, writing and the grace of God have brought me to this point in my life. I can't imagine being happier.

Bill Kraft, said...

Thanks for writing, Raja. I know there is a whole lot of information in my books. I would suggest you reread the books or at least those portions that deal with trading basics like creating the trading plan and exit strategy. When I began, I read the first trading book I got 7 times before I felt at all comfortable to take the next step. I do have a set of DVDs that show a full two day basic class that might be of help. They sell for $199 for all 5 DVDs.
Bill Kraft

Bill Kraft, said...

Congratulations, Word Wielder. We're definitely on the same page.
Bill Kraft

Anonymous said...

Although I have not achieved the level of success that you have, I agree wholeheartedly that trading for your own accounts is the true way to personal freedom and the American way. Where else can you take your fate in your own hands without the encumbrances of employees, inventory, excessive regulation, decision by committee, and the like? Sure, there is risk but as you so correctly point out, there is risk in everything. Do you commute to work by car, train, or bus? Ever hear of accidents involving those means of transportation? In trading it is possible to limit the risk to an acceptable level.
My problem, if you can call it that, is that I have to constantly monitor client accounts. And they do not always follow my recommendations. What I need is more time and capital to work with my own accounts.
Keep up the great work, Bill.

The Old Trader

Bill Kraft, said...

Thanks for your comments Old Trader. It is pretty unpleasant, I'm sure, when clients don't follow your advice and then blame you for the results.
Bill Kraft