Being a trader, or one who focuses on the financial side of Magic, is not much different than being a small business owner. The number one mistake small business owners (and Magic players) make is not knowing their numbers. One needs to know how much money is coming in and out on a regular basis, what quantity of sales they need to turn a profit, and their success rates. Further, in order to continue to push a small business to the next level, they must be continually setting goals, and adjusting them.

What is your collection worth, if you needed cash today? What about if you could take your time to dump it all? What about the portion of your collection that is up for trade, on display in the binder? How much have you invested in your collection? Have you pulled any money back out of it? This is all information that any business has on hand. Financial statements provide the business owner (or even shareholders) a snapshot of exactly what’s going on at all times. If you don’t know the answers to these questions already, you really should, if you plan to finance any portion of your Magic hobby by trading. Some people like to track things down to the minute detail, others with broad strokes, but ultimately without knowing your numbers, you can’t quantify your results. Spikes across the country check every Thursday for the DCI update to see how their rating has shifted. To be a financial guru, you must do the same. Many of you are familiar with “Pack-to-Power” among other similar trading challenges. These are really just ways to quantify your results. “How long will it take me to trade a $3.99 booster, into a $300 piece of power?” Of course, it's no shy goal to increase your portfolio 100-fold, but it doesn't matter what the goal is, just have one, and track it.

There are a number of ways you can track your results, and I’ll outline a few of them here. Some may be more applicable for you than others, and I strongly suggest taking these ideas and making them your own, so that they fit your needs.

1) Your trade binder is your portfolio. In order to properly track the value of your trades, you need to start with two things. A source for valuing your cards, and a frequency of updates. Depending on how much trading you do, you may want to be tracking your results daily or weekly, maybe even monthly, but anything beyond once a month is simply not enough. You also must have a benchmark of what you’re pricing things against. I’d suggest starting with Chris’s buy list updates, here on QS Insider, but any method should work fine, as long as you are consistent. Depending on how savvy you are with spreadsheets, you can make this as detailed as you like.

It may be helpful to record whether you feel each gain or loss in value was due to speculation or simply a gain in value due to a good trade. Knowing your strengths is a great way to maximize the value of your time invested into trading. Personally, I’m a much better speculator than trader, and focus my trades accordingly. I prefer to trade at close values, but with my own speculation on the line as to how the future values of those cards might change. If you’re like me, treating your trade binder like a stock portfolio is perfect, record the values where you get in and out of each position, and TRACK YOUR RESULTS. The spreadsheet I use is actually the most basic Stock portfolio template built into excel. (In Excel 2007 it’s called Portfolio Analysis) Your mileage may vary.

2) What are your goals with trading? To cover your expenses of playing? To make some extra cash? To grow your collection? In any case, the reason you are trading is you’ve found it to be cheaper than simply buying the cards you want. Are you injecting funds into your collection? Are you selling cards out of your binder to cover costs of events or travel? Keep a ledger of every dollar you spend on Magic. The simple task of writing it down keeps you honest about your hobby, and your trading. My LGS offers store credit that is issued to you in gift cards. I have the ability to log in to the card issuers website and track all my purchases at the store. I filter them to categories like: Event Entries, Card Purchases, Snacks, Event winnings and Card Sales. It allows me to quantify what portion of my freerolls (see: Draftcycle) are coming from trades and which are coming from winnings. I know that when I trade in cards from my binder for store credit, its because the value of my binder has grown enough to warrant such a deal. Even if it’s not as easy as logging in, with a little ‘copypasta’ to a spreadsheet, take the time to do it.

3) What does it take to keep your events free? How many events do you hope to play each week/month and how much money will that cost you? Ryan Spain of the Limited Resources podcast, the foremost authority on all things limited, (twitter: @modogodot) has an awesome spreadsheet he uses to track his MTGO limited events. He tracks wins and losses, but more importantly for our purposes, he tracks his net gain/loss of tickets and packs. He also records what rares he drafted, if any. He was kind enough to let me post his spreadsheet here, thank him on Twitter, or in the comments of his podcast on MTGcast. I use my LGS gift card to track my results, but you should know what the outflow is, and how you will replace that with an inflow. If tournament winnings aren’t the primary driver for you, then your trading and speculating will need to be. If you know you need $30/week to participate in the events you want, it gives you a goal to shoot for when reviewing your trades each week. Drafts are an expensive habit, so you will want to make sure you've got a plan to fund it. You’ll gain satisfaction and confidence when you see how easily you can meet your goals, once you’ve actually set them.

Knowing your numbers really is as simple as that. It does take some time, but the benefits are well worth it. It keeps your energies focused, provides feedback on your trades and events, helps you attain your goals, and forces you to consider what outside funds are being injected into your hobby. I’ll be honest, I’ve seen many gamers who have themselves fooled as to how much money they spend on this game. While its not bad to spend money on your hobby, its bad to be dishonest with yourself on exactly how much its costing you.