Forex

Why Do You Want to Trade Forex?

rickwright
Rick Wright
Instructor

Hello traders! This week’s newsletter comes to you from beautiful Minneapolis, Minnesota, where the temperature has already dropped into the 60s – a far cry from the 90 degree weather that we’ve been having in Texas! This week I am teaching a futures class with a new-to-Online Trading Academy instructor named Wayne. (His full name and bio will be on the OTA website in a few days.) During class, the conversation of why do you want to trade comes up, as it does in every class. Your why you trade should be incorporated into your trading plan, and this week I will show you how-and why!

Now, most people think that the reason they want to trade is to “make money.” This is not the why. This is the how. Uh, what does that even mean?

Everyone has a real reason for trading, and it is rarely to “make money.” The money that comes with successful trading is how you can achieve your own hopes and dreams which is the real why you might choose to trade. Some people want to replace an income; perhaps they don’t like working for someone else. Years ago when I had a regular job with a suit, tie, and the paycheck every two weeks, I was always a bit disappointed that I was working for someone else’s dream to come true. I was also not a huge fan of being paid what someone else thought I was worth. As a trader, you might have a why you trade reason of “being paid what I am worth” or “fulfilling my own dreams” or even “never having to wear a suit and tie” again!

Because many of our students are parents of (hopefully) future traders, what happens if a child of yours wants to become a doctor? Unfortunately, Online Trading Academy doesn’t offer doctorate degrees (except maybe in the Extended Learning Track classes)! This particular why might be sending your child to Harvard Medical School.

A couple of my younger male students in recent months have expressed the typical why – a sports car, or even an expensive condo on Miami beach. Others closer to retirement have suggested a full size recreational vehicle to travel the country in, trading at the various campgrounds throughout the United States, or even a cabin in the woods somewhere. The point is this: there are many different reasons to trade – the money that comes with successful trading is merely a means to that goal. So how can I use that goal in my trading plan?

By now, I’m sure you have read Dr. Woody Johnspn’s Lessons from the Pros articles about the psychology of trading. Since you have, you know by now that the most important/most difficult thing in trading isn’t looking at charts. The hard part about trading is what is going on between your ears. By knowing what is really important to you –your why- you can use that goal to hold yourself accountable to what your real long term goals are. In every class that I teach, I heavily emphasize the importance of a written trading plan. With that written plan, you will need a cover sheet, right? Take a wild guess on what I recommend to go on that cover sheet. Go out on the internet, look for some pictures of your true goals. Copy and paste these goals onto the cover sheet of your trading plan! I want those goals to be staring at you whenever you are trading. This is a great way to hold yourself accountable to your true boss-your long term goals. How about making those pictures of your goals your computer desktop picture? No way will you be able to miss it then! Many new traders need a way to apply some self-discipline, because trading can be very lonely. The more solitary your trading and life are, the easier it is to backslide on trading rules and eventually lose a lot of your capital. Holding your goals up in front of your face will hopefully keep you on a disciplined path to trading success.

Another way to use your true goals to help with your trading discipline is to use the “dream board” concept. One of the better dream boards I saw was in another Midwestern center – thank Katy from Kansas! On Katy’s board, she has several long term goals: from something as simple as a new SUV, to something as awesome as funding her niece’s college education. Now that is an admirable goal!

The point is this: by knowing what your true reasons for trading are, you will be able to hold yourself accountable to them. Every time you break a trading rule, those tangible goals will get farther away. Every time you follow your rules, those goals get closer and closer. Here’s to you achieving your real goals in trading!

Until next time,

Rick Wright

rwright@tradingacademy.com

Disclaimer
This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.