Trading is notoriously a business that can make or break anyone, whether they be the slow-and-steady long-term trader or a thrill-seeking day trader. The key, according to Forbes, is having a consistent trading philosophy that melds well with your personal trading psychology. This is, understandably, something very esoteric. How can you put the countless micro-considerations that traders use into a cogent process document? The answer comes through business mapping. By demystifying a process and getting it down on paper, traders can have an ideal document of reference to use, both for personal trades and for the financial benefit of their institution.
Early trading, and the benefits
If you ask business magazine Entrepreneur, there are three crucial elements to any new stock trader: technology, strategy, and mentorship. The first two are areas in which business process mapping can be absolutely crucial. Amateurs can first use business process mapping to help learn and comprehend the various types of trading instruments they will be dealing with, and then again to help elucidate their strategy. Having comprehensive business mapping to enable them to see where their strategy leads and the steps they would reasonably take to stick to that strategy is really important. It’s also important in showing other traders, and potential new colleagues, that you have a plan and strategy that can be replicated elsewhere. This will help investors to network and gain mentors, or, in time, staff in their own business. Part of this is due to the trading-tech interface.
Algorithms and day trading
Increasingly, trading is dominated by computer algorithms that make the best picks based upon a formulated strategy. That includes the strategy that you or your business are using as part of your trading game. A study published by the Hindawi Mathematical Problems in Engineering journal outlined the importance of these algorithms: picking and applying the correct type to each market is linked to improved profits. That algorithm being high quality and indelibly linked to your trading strategy is dependent on your communication with programmers – an area where, once again, up-to-date and high-quality business process maps help immeasurably.
Your future gains
All of this comes together to focus on your long-term trading strategy. Regardless of how you choose to trade, it’s essential to focus on five-year gains, and then move up to 10-year gains. The richest and most successful traders on Wall Street have been able to achieve their success through this long-term planning, Warren Buffett is the most obvious example. Comprehensive business process mapping provides a timeline on which your business can progress, and a way to easily breakdown blocks in the road in order to troubleshoot them and improve your chances at long-term success.
Don’t overlook the value of business mapping when you decide to start trading. An invaluable way to put your strategy into cogent terms, it will help you to achieve long-term success. In an industry as volatile as trading, that’s a luxury that many others will forsake.