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Hi Guys
I am having some difficulties understanding and explaining to a fellow friend how different trading is compared to a classical sales job. I am sure you will pull out a 1000 reason in a heartbeat, so here am I :-)
He is self-employed, works in import-export and buy and sell electronic equipment for a living.
He is looking to venture into equity trading being affected by the economical crisis these days; and came to me for technical advice (brokers, stocks, softwares, etc...) as he knows I have been doing that for long now.
During our conversation, I pulled out the psychological barrier, but just realized that he most probably faces those same emotions as we do... he didn't seem to give such an importance to what I was trying to say.
The essence of it, being that he trades electronic equipment while we trade pieces of companies to say the least; but the fear, the greed, the end of month pressure, time decays, economical crisis, human emotions and all the rest should be the same!
I don't have no clue as how it feels to work in sales and on ones own, as I have a proper full time job and only trade on the side for extra income. but is there any member in here doing both jobs or with some prior experience that could explain how the two differs? or probably not.
Why is it that there are more successful self-employed salespersons than there are traders? Or is it just an impression of mine?
And what is that component that differentiate the two if any?
Thanks in advance, and happy trading
Cheers
Fadi
Successful people will do what unsuccessful people won't or can't do!
The biggest difference between trading and a normal job is that in trading, you're livelihood is on the line with virtually every decision.
Although sales can be heavily performance dependent and you might not get a paycheck that week if you don't perform, you don't risk not only losing your paycheck for that week, but all your future paychecks as well.
Imagine in sales, if it were possible to not only lose a sale (or not land it) but when you lose the sale, YOU as the salesperson have to come up with the cash to cover the loss.
Imagine at the end of the week, if instead of not making any money, you owed money......
Sales is also closer to a direct effort relationship. In essence, the harder you work, there's a direct relationship to your performance. If you simply knock on more doors, over time, (your effectiveness notwithstanding) you'll get more sales.
Trading isn't something where you can just beat the market through hard work....hard work is important and necessary, but hard work alone won't mask incompetence in trading.
Trading requires a ton of different skills and attributes....none of which are enough to get results all by their lonesome.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
Just drop a big pack of something that looks like cocaine on his desk and tell him he has got 2 minutes until the cops arrive. Sit back and have a look how rational his reaction is...
I am a business owner of an Air Conditioning company. I am fairly new to trading as I have only been at this for 5 years and I am just starting to earn consistant money these last 8 months.
You have pointed out some interesting similarities to sales and trading. I agree with you.
However I must remind you how personal this journey of becoming a trader is.
In our daily jobs there is black and white. things are much easier. We have standard operating procedures. We don't deal in probabilities.
My humble opinion: the mechanical act of trading is easy. It is the psychological portion of this journey that takes out 95% of the people who ever attempt it.
Money does some crazy things to people.
Thank you Patrick for your contribution.
It is that psychological difference that I kind of thought replicated to a classical sales job too... but I guess I am wrong.
My question is, if you have let's say bought a container of air conditioners at a given price; you obviously have a target resale price in mind for profit... same as we do with stocks.
But the uncertainties are there; and what if you don't find all the buyers you want in that month? What if you don't get your minimum return per month to survive? Will you do some discounts? Accept to sell at a loss?
What if the crisis is upon us, growth is slowing, people are not willing to invest in new units, and you find yourself stuck with a stock you can't liquidate?
Thinking of these points, I kind of relate to trading in the sense that we buy stock and shares here and there at a given price, and look to sell them back at a higher price... but the uncertainties are there, supply and demand and economical situations make it such that we probably are not reaching our desired target price, not making enough this month to cover our expenses, or simply a company in which we own shares is getting rotten and its value decaying and have to face the decision of selling at a loss or not.
Successful people will do what unsuccessful people won't or can't do!
In my opinion, trading is absolutely diffrent than other jobs. Trading is the most similar to proffesional sports - as it describe Brett Steenbarger.
Trader is like proffesional athlet, basketball player, etc. You must practice every day and make lot of hard work and than, you have 1 minute, when you show your skills (in the case you are runner for 400m). Same in trading, 99% of time you sit before the screen, practice, hard working and than you trade a few minutes of this time.
We are what we repeatedly do. Excellence then, is not an act, but a habit. Aristotle
Trading is very different. I have spend almost 8 years in outside sales. In sales if you follow a certain formula, with some tweaks for each individual, you might be successful. Paul Tudor Jones has stated many times that if he gave all the rules to his method over 90% would fail. Lack of discipline, to attached to the money (me), doesn't fit their trading personality, etc. There are many way to make money trading, and even more for losing everything.
In sales I get a base salary, healthcare, paid vacation, in trading there is no base. You put yourself on the line with every trade. Ok you say, I do that with every sales appt. True, but if I bomb I still get paid by my employer, unless it happens to often and then they fire me. Even then I made money. You blow enough trades and you blow out, you BK, you are done.
In sales with this recession I can make 60-100k. In trading most make less than that and some maybe 5% make a lot more.
Finally in sales if I goof off my boss cracks down. In trading, you have wear all hats. Trader, tax planner, business manager, psychologist.