In every Trading workshop I go to, I would count how many women are in the class and we would usually make up 10%. I wondered why – like it’s hard?! On the other hand, in my playgroup, and favourite cafe when they see me checking stock quotes on my phone, many get interested seeing how it can let me earn an income while doing what moms do (bring kids to school, play at the park) and want to learn about Trading. And why not, Trading is simply Buying and Selling. And my belief is that women do this a lot. In our world, this is called Shopping. I admit the main activity is the BUYING, intended for keeps – but we do Sell or otherwise get rid of something that has less or no more value. Anyway, considering women shop a lot, I thought we would be natural traders! We just don’t realize it.
In fact, this could be you:
1. You search high and low, visiting several shops, or shopping centres even – looking for an item selling below value for some reason. Anyway, considering the whole scheme of things, you want the item and is selling at a steal. You’re a Bargain Hunter. In Trading, this is called Value Trading.
2. You like to buy what is in fashion. Buying Blue? That is soooo last year! You would only go for what is in the new style. You’re in with the Trend. In Trading, this is called Trend Following or one who follows Seasonal concept in which weather patterns (a prevailing trend) dictate what would have a high demand with prices sure to move up (or down).
3. You buy what is not in season because you know it would be back –In Trading this is called Contrarian or to a certain extent Band Trading (like rubberband – stretch and go back)
4. You buy when you see a “window of opportunity” or loophole, or in shopping terms these opportunities are called “Sales”– in Trading this is called Arbitrage.
So you see, there are many concepts that work in Trading or Shopping that women do and do well. In Trading, there is money for everyone.
The other thing that should help understand this whole Trading exercise is that, it is like shopping for Shoes. Yes, Shoes!
1. We should know what we are after . “Oh I really need strappy sandals for a wedding”.
Same as in Trading, start by having an Objective. Say you want to “consistently achieve 3% of capital per month (total of 36% per year!) . If you don’t know what you want, where you want to go, YOU CAN’T GET IT RIGHT!
2. We buy what is a good fit. Usually, you wouldn’t buy a shoe of a smaller size. Like so in Trading, if a trade does not feel right for you but you went ahead being influenced by someone else, this tends to be a loser. So Trade only what fits you, your timeframe, trade only the stock/industry you know.
3. We buy a lot! Formal shoes, running shoes, many styles of sandals, boots, according to color, material etc. You have to have a range of shoe options. Point is you have got to budget for all this kinds of “shoe situations”. You shouldn’t spend too much on one shoe. So this important lesson in Trading is that you have to keep how much you risk at an amount that does not blow out your budget and be able to fund next opportunities.
4. We buy and wear shoes according to the conditions. In winter we would usually wear closed shoes so we don’t get cold, in the summer, sandals are popular, to keep cool. So in Trading, you have to have an idea of what the market is doing. Are people optimistic and buying things in the hope of rising prices (Bull Market), or are people scared and dumping their assets before the prices go down more (Bear Market)? Or are people not sure where things are going and there is a tug of war between the people who are optimistic against those who are not (Sideways market). You need to determine Market condition before deciding on action or strategy, or choose not to trade when market is too choppy.
5. We buy it when we look and feel good. Easy when deciding for shoes but was a surprise for me it also applies to Trading. No matter how much the trade looks positive from your analysis, but when you don’t feel good about it (or afraid) that it won’t turn out right, worrying could make you cut short a profitable run, this is the worst you can do in profit-taking! So before opening a trade, you need to feel good about it. If not, don’t trade it.
I can probably go on and on and on, but the other important thing is, as there is always another shoe…. as in trading, there is always another opportunity. Be patient and you will find.
(Thank you to Via Uno Shoes!)
14 April 2011
This article has recently been published in an eBook by Emergen Australias’ community of Young Leaders.