October 20, 2011

Similarities between trading and business by Seykota

Successful trading can be thought of as a business. Your new focus is running Technical Tools. Can you draw some comparisons between trading and running a business?

Yes. I find a lot of similarities between trading and business. In trading, I have learned to ride the long-term trend, cut losses and manage money. In the case of Technical Tools, our customers, suppliers, competition and trade publications such as STOCKS & COMMODITIES indicate the long-term trend and help point to where we should be heading as a company in this industry. When I hire someone, it is usually on a trial basis until a strong "trend" of productivity sets in. Cutting losses in business has to do with discontinuing unprofitable products. Firing, also like cutting losses, is tough on the emotions and vital to the eventual  success of all involved. Managing money means spending less than we make as well as not betting the ranch on just one idea. I find that the principles of sound trading have close analogs in running a business.