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TRADING #101 COURSE – PART THREE: SETTING UP YOUR BUSINESS – WWW.TRADERSCOACH.COM
Chapter 15:
Accountability, Setting Stops and the Rogue
Factor
One of the biggest challenges for most independent traders is to create a system of
accountability. Generally, traders work alone and do not have a mandatory checks-and-
balances hierarchy to work within such as a day job or corporation would require. They
have no one to answer to.
This is quite different from corporate life. In a corporation every employee from the
janitor to the CEO answers to someone on a daily, weekly, or at least quarterly basis.
Even the CEO must report to the board of directors or the company shareholders, and
the big boss’s job security is vulnerable if the company’s performance fails.
The accountability that employees in corporations are subject to results in them having
formal annual reviews. Many of them are awarded bonuses for quantifiable performance
results and receive raises to their annual salaries based on the previous year’s work.
In the corporate world when individuals are not performing their job adequately, they
receive a series of verbal warnings and written warnings before they are officially fired.
There are even times when employees get fired for not doing their job adequately and
they can still get unemployment paychecks every week for quite a long time. And some
top executives when they get fired, will get a golden parachute that many of us only
dream of.
This is not so for the independent professional trader. Unless the individual trader sets
up a well-thought-out system for accountability, the trader’s financial stability can erode
ever so quickly, without any warning or notice. Traders can find themselves making less
than minimum wage and often can find themselves losing money as opposed to making
any money at all.
They might even get their pink slip (meaning their trading account balance has gone to
zero) without so much as a whisper of a reprimand or warning from their boss, who of
course is none other than themselves. There are no federal and state laws to protect
them from making less than minimum wage or from a harsh and painful termination.
They are on their own.
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