Thursday, June 11, 2015

Why Do You Trade?

Love is of all passions the strongest, for it attacks simultaneously the head, the heart and the senses.
Lao Tzu
Why do people trade? The obvious answer to this question is, "For the money." It may be a no-brainer to many, but to experienced, seasoned traders, the answer isn't always so obvious. When you are focused on the profits and the glory of making winning trades, there is a tendency to put too much pressure on yourself. When the pressure is too high, it becomes easy to choke, making trading errors and ending up with a blown out trading account. 

What experienced, seasoned traders know is that it is vital to love trading for the sake of trading. You should enjoy trading so much that you would do it for free if you could. If you were to look into the backgrounds of top traders, many seem to be the same: They tried to get a job in the trading industry as soon as possible, any job as long as it involved trading in some way. They were fascinated by the markets; the money was either secondary or not an issue at all. Ask a typical non-trader, or new trader, or even a would-like-to-be trader what he or she thinks inspires traders, and the impression is quite different. Most will answer that traders are out to make big bucks, achieve high status, and show it all off with luxury cars and nice homes. While these may be some of the side benefits, they aren't the primary motivators. Successful traders love the challenges the markets offer and view their work as meaningful.

Psychologists have long known the advantages of pursuing goals that are intrinsically interesting and personally meaningful. When trading is pursued for these intrinsic rewards it can be especially fulfilling. It is much better to follow one's passion than to be overly consumed with competition, financial reward, and high status. Psychological studies have shown that people who pursue goals for intrinsic rewards are better adjusted and more satisfied with life, compared to those who seek out external rewards, such as profits and status. They are also much better at controlling their ego, which we have discussed many
times, how ego can be the deathnell for traders. They can easily accept their limitations; they don't mask their limitations by touting their superb trading ability. 

You have a choice when it comes to the reasons you pursue trading. You can focus on the glory, the profits, and the status. You can be a big shot and show your friends and relatives that you have the upper hand. But you'll pay a big price for this approach in the end. In all likelihood, you won't be able to maintain profitability over the long term. It's much more fulfilling to trade for intrinsic, passionate motives. When you follow your passion, you'll find trading intrinsically satisfying, enjoyable, and meaningful. You will gladly work tirelessly to achieve high performance levels. So focus on intrinsic rewards. You'll enjoy the process of trading. And in the end, you'll stay consistently profitable.



2 comments:

Kevin Driscoll said...

Bill, please call me when you are interested in presenting information about your products and services for financial investors at http://www.OnlineTraderCentral.com We send your email to our entire database of day traders that has been growing weekly for over fourteen years…

Also, if you have any recommendations for other people or companies you feel could add value and present something that is both interesting and educational to our worldwide database of day traders, please call me anytime 24x7 at 508-877-9973. With the many multiple repeat presenters at OnlineTraderCentral, something must be working. Our Presenters would not keep doing something that didn't result in increased sales. Dr. Bill McDowell completed #68 last month. Please check out a few of the past 2,000+ presentations and see what others have presented: http://1stworks.bondwaresite.com/mod/emarket/index.php
Kind regards,
Kevin H. Driscoll
Your hotComm and OnlineTraderCentral account manager
Tel: (508) 877-9973
iPhone: (617) 901-6232

www.OnlineTraderCentral.com

Bill Zimmer said...

Kevin as I explained to you in an email, the Prudent Trader is really not intended for or geared towards day traders. If you would like to link to this site that is fine.

Bill Zimmer