In my view, the prime ingredients for success in any endeavor are the right motivation, mindset and attitude, and a strong process. An important question for any new trader is why trade? One reason so many people fail in this businesses is partly because they lack the drive to persist through the tough times that often happen over the course of learning how to trade.
The obvious answer to this question, “Why trade”, is to make a lot of money. My experience with traders that focus all their attention on money, however, is that all their decisions are fear based. In other words, they spend most of their energy on not losing and are very quick to take profits. They usually cling to their losers in an effort to avoid them because profits will only come by holding on long enough for the trade to work; or so they think. This attitude will no doubt have devastating consequences to their trading accounts over time, and many will wash out before they learn that focusing too much on money is not the answer.
In my opinion, it’s better for a trader’s mindset to pay less attention to the money aspect of trading and more on what the monetary rewards of successful trading can bring us. These are different for everyone. For some, it may mean not being beholden to any one person or corporation for their livelihood, and that translates into freedom. For others, it may mean time with family, friends or simply doing things that they truly enjoy. For yet others the answer to “Why Trade?” may be sending their kids to a good school, or perhaps traveling the world. And philanthropy, giving something back, is always a good motive.
A misguided idea about why people pursue a trading career is the belief that because there is no boss to report to, a trader can do as he or she pleases without being accountable. This cannot be further from the truth as successful trading can only be attained by intense effort, diligently following rules and, often times, stepping outside of one’s comfort zones. When this reality finally sets in, many will fall by the way side as the short-cuts and easy money schemes are quickly dispelled.
Profitable traders are very competitive individuals who also enjoy being challenged. And believe me when I tell you, being consistently profitable in trading will probably be one of the most challenging undertakings you will ever pursue. This has always been one of the allures of trading for me. Also, the fact that there are no limits in trading — in terms of the monetary gains possible — has a great appeal. Most jobs or careers have some type of limitations, but not so in the trading arena.
The thrill of speculating is the answer to why trade for some as it provides excitement to those that need the “action”. The chance of a “big score” keeps these individuals funding their depleted futures accounts time and again until the trading capital simply runs out.
Here at Online Trading Academy, our motto is that we trade for a better life, not to make trading our life. This statement pretty much encapsulates all the good things the opportunity of trading can provide.
So, what excites you? What gets you out of bed every morning? What activities do find joy in? What makes you happy? This is where true motivation comes from, your answer to “Why trade”. Trading should be a means to that end. That end has to be individual, but it must be rooted in something that is strongly desired rather than something that would be nice to have. This a vital ingredient for success.
Putting money at risk is not easy, but focusing on the reward can change the reasons you trade. So find your positive motivation, set some goals, build a road map to get you there, and go after it!
Until next time, I hope everyone has a great week.