Lessons from the Pros

Specialty Skills

Becoming Motivated in Your Trade

To be motivated means that you have an adequate incentive, and you are moved to take action.  Motivation is at the crux of becoming successful in any endeavor, and trading is no different.  Of course, motivation must be focused on the “right” target, objective, and goal that is because motivation works in both directions.  Motivation is energy, and we know that energy can both provide life-support and it can take it away.  How many times have you been motivated to move a stop, chase a trade or exit a trade prematurely?  In each case you were motivated, it is just that you were motivated towards the “wrong” aims predicated upon limiting beliefs and errant emotions like fear and greed.  So, when we talk about motivation or being motivated, we want to be motivated in the direction of success and getting the results that we want.  You want to be motivated to do your best and be your best.  This otherwise could be described as peak performance.

trading results

Peak performance trading means getting the trading results you want.  The most powerful tool you have is right between your ears, as long as you learn the combination to unlock your inner self and unleash this strength.  To unlock your inner strength you must be in the “now” of the trade.  This means that you are aligned physically, mentally and emotionally; in other words your system is geared to work in the same direction and on the same goals.  If your system is aligned, you are accessing and activating your internal resources to bear on the task at hand. But, how do you align your system and overcome all the noise of counterproductive thoughts stemming from limiting beliefs, and erratic unsupportive emotions that ultimately drive behaviors that lead to bone-head trades?  One thing for sure is that you’ve got to engage your passion; you’ve got to identify what you are most jazzed about and connect that to your trade plans and keeping your commitments.  When you are motivated by a deep seated, inner desire, for instance the desire to be a “great” trader as opposed to a “mediocre” trader; you would become driven by a fire-in-the-belly intensity to do only that which is in line with being consistent in your follow-through.  When you are intensely focused on raising the bar of your game, it becomes less about whether or not you made a profit in any particular trade and more about the excellence of your execution.   A magnificent obsession is developed around the details of the play and being meticulous about your strategy.  Wouldn’t it be wonderful to have a magnificent obsession about doing everything that it takes to be consistently successful; where success in the trade is defined as how well you executed your strategy and followed your rules?

Neurologically, when we are totally engaged in purposeful achievement, the neurotransmitter dopamine is released, which sharpens focus and increases performance while creating a profound sense of well being.  If you’ve ever learned to play a game or sport very well, then you have experienced the drive to be “better.”  It really is about “how you play the game.”  John Wooden, the great UCLA basketball coach with a record 88 wins in a row, which only recently was tied; seldom talked about winning but more about preparing.  Roy Campanella, the great Brooklyn Dodger said about baseball, “…you’ve got to love it like a boy and play it like a man.”  He spoke about that level of childlike focus that is immersed in wanting to do it well so badly you are willing to be uncomfortable in the service of getting better…and love every minute of it.  You’ll practice for hours in the rain, cold and through pain because you want it that badly.  Consider a toddler learning about her world.  Does she need to be told to listen, to look, to imitate, to try and try again?  A child is driven, and if she sees what she wants, she’s got to have it, or if she sees behavior, she must imitate.  She struggles, falls and rises, as she is obsessed with learning to walk.  She makes sounds and tries to talk with a dogged determination.  That baby is keyed into a passion that drives her to see, to listen, to imitate, and to learn.  The passion that drove you as a baby is still inside you; it is a part of your humanness.  Unfortunately, we are also taught to remove ourselves from the passion as we become socialized into “good citizens.”  Socialization can stifle curiosity, creativity and that playful spirit that sees life as a series of games and puzzles to figure out.  When this happens, or when we become “grown up,” that inner spark to explore the reasons why, and to be wide-eyed at the wonders of life, is often lost to the detriment of a rich and growth-oriented life.  But, when rekindled, this passion galvanizes your energy, curiosity and trial-and-error courage.

Making mistakes in the service of learning becomes a way of life when your passion is engaged.  This passionate attunement to doing what effectively magnetizes your desires to you also makes you feel like a hungry lion, driven by the deep desire to do that which gets you the results you want.  Consider the prey the lion must stalk and kill in order to survive and thrive; if she does not learn to do that effectively and in the proper sequence, she will not eat and surely will die.  She must learn the process of hunting first in order to be successful in the hunt.  Using this metaphor, the protocol of steps involved in successful trading is identifying the high probability target, stalking, patiently waiting, and then entering the pursuit.  You first want to ensure that you have that reality firmly locked in your mind.  You must develop the intense desire to learn the hunt, or to do whatever it takes to ensure success, and success is defined as faultless execution and follow-through.

The type of motivation is also part and parcel to this conversation.  We are not speaking of external motivation, the kind you get from listening to a rousing speech or a riveting trading lecture. This is an outside source.  This is a good starting place, but it doesn’t last.  It has artificial peaks.  The day after the speech, you’re 30 minutes early to your trading desk, doing homework and vowing that you’re going to “do it right.”  This may last just long enough for the trade to go against you—then, with one failure to include a stop loss, you’re back in the same boat, and the rules might as well be thrown overboard.  This kind of motivation leaves you with a false sense of well-being.  You get a shot in the arm, but it wears off.

Then there is the most obvious “fool’s gold” motivation—money.  It too is short lived, because money is transient and of itself has no substance; it is only good as a medium of exchange. You can’t eat it, drink it, live in it, drive it or wear it – at least not for very long.  Many believe that they want money, but to be specific, what they really want is what money can buy.  I would contend that if you had everything that you have ever desired, money would lose its appeal.  The literature is replete with studies that support the notion that money is a poor motivator.  One of the articles written about this subject was a Forbes.com missive by Charles S. Jacobs, March 6, 2009 entitled, Why Money Isn’t A Motivator.    An out-of-proportion fixation on money in any particular trade can be a prescription for greed.  Greed distorts reality into a phantom of itself, resulting in decisions based on conjured notions of what you “think” will happen, not what is taking place in the charts.

Then, there is fear: “If I don’t make a profit in this trade then I am screwed!”  Fear, like greed, fragments, blurs and moves you to grasp for fading phantoms that leave you as bait in waters teeming with sharks eager to feed on your capital.  I’m sure you’ve heard the adage: “Scared money does not win.”  The only motivation that moves you to do what is required for consistent long-term results is that which is forged inside where those results are tied to reasons like family security, a rich life, personal pride in doing a good job, and peer recognition.  This is where your passion resides.

So, rev up your internal engine around something that you’re jazzed about and connect it to your trading to love it like a child and trade it like an adult; where the child is magnificently obsessed with the joy of doing it masterfully and the adult is focused on what matters most – faultless execution.  We teach a number of tools with a specific emphasis on how to engage your passion in the service of power trading in the Mastering the Mental Game Online and On-location courses.  To find out more ask your Online Trading Academy representative.  Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading

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.