Starting and operating a trading office is one of the most profitable things one can do today. This is because of the nature of the financial market where you can trade for 24 hours every day. It is also an interesting field because of the nature of global finance where deals are announced every day.
Having a trading office enables you to make money and do something that is very interesting. However, having a trading office can also be challenging.
In this article, We will explain some of the top mistakes you should avoid when running a trading office.
Office Team Management Mistakes
Micromanaging Your Team
The success of any trading office is the team. These are the people who do the trades for you, so if you want to succeed, you need to have a high-quality team of traders.
However, in our experience, We have seen many office managers who fail by micromanaging their team.
They keep on checking what they are doing and giving them instructions. This is wrong because traders want to feel appreciated. They want to trade using their own knowledge, and not being told what to do.
This does not mean that you should not suggest your traders what to do.
As the office manager, you have the right to feel good about your business and accomplishment. However, this should not come at the expense of your management skills.
You should not be bossy, because employees are usually not happy with bosses who want to prove that they are bosses.
A similar but endlessly better solution is to be a good leader.
Not firing traders
As a office manager, you will be successful if your traders do what is good and right. However, when you have a team of people, some are likely to do mistakes. In such a situation, it is always a good thing to replace the traders.
The mistakes many people do is that they are very lenient on their traders who make mistakes. While firing or suspending a trader is a difficult thing, the fact is that it is usually the right thing to do for the long-term success of your business.
A common mistake that people do when hiring traders is not to pay much attention to the hiring process. Since a trading floor is a real office, we recommend that you take the interviewing process extremely serious.
This means that you should take your time when interviewing potential candidates. At times, depending on the size of the firm, you can also hire a real recruiter to help you get the right candidate.
For most new floor owners, their first hires are usually people they know such as friends and family. While it is possible to get good candidates this way, we recommend that you limit it and set strict rules when you hire them.
Further, always look at the trader’s interpersonal skills. For example, it does not make sense to hire a good trader who does know how to co-exist with the other colleagues. Remember that you want to work in a conducive environment.
Your management mistakes
Owning a trading office can be an exciting thing, and it can make you a lot of money. A common mistake We have seen is when office managers become extravagant. They start spending their money on unnecessary things because they have seen other successful people doing the same.
This is not a good thing!
No matter the amount of money you make, you should live a humble life. Therefore, we recommend that you have good money management skills.
For example, take time every month to determine the financial performance of the floor and then allocate resources accordingly.
Related » How Much Do Day Traders Make?
There are easy ways to save money when running a trading floor. For example, instead of hiring a fancy office, you can use your spare room at home. Indeed, most people who run their floors at DTTW do so at their homes. As your fund grows, you can then lease a bigger office.
Another costly mistake when running a trading floor is known as Fear of Missing Out (FOMO). This is a situation where traders and investors do what everyone is doing or buy an asset that is rising.
In most cases, this usually does not end well. Instead, we recommend that you avoid fixing something that is not broken.
As such, if your traders are doing well trading tech stocks, don’t pressure them to trade biotech because they are performing well. Similarly, if your traders are excellent at scalping, don’t pressure them to become swing traders.
Not embracing teamwork
In our experience at DTTW, we believe in the power of teamwork. Most successful floors attribute their performance to teamwork. We recommend that you all work as a team to identify trade opportunities and understand the state of the market.
When you embrace teamwork, newbies will be able to learn from their experienced peers.
While being extravagant is not ideal, another problem is failing to spend money. As a office manager, you should spend money on the right things.
You should spend money on your office to make it look good for your traders, or to buy the right technologies as well. Doing all this will make you a successful trader and office owner.
Running a trading floor is one of the best practices for any trader. In this article, we have looked at some of the most popular mistakes that people make when running their floors.
Fortunately, some of these mistakes are easy to change. In general, you can aim to create a floor where there is open communication and where people are ready to grow.
External useful resources
- 5 Common challenges of international business you should consider - Harvard Business School