Module 12 Innerworth — Mind over markets

Chapter 323

Enduring Success

Becoming a winning trader isn’t easy. Few make it, and of those who achieve profitability, few realize enduring success. There are numerous stories where traders put in a heroic effort and are rewarded with huge profits, but they have difficulty keeping up the pace. Over time, they burn out. They use up all their energy and end up leaving the profession. Psychological factors play a vital role in maintaining long-term success. In a recent article in the “Harvard Business Review,” Laura Nash and Howard Stevenson discuss factors that all people must address in order to maintain success over the long haul.

 

Many people believe they should devote all their energy to achieving one goal. Drs. Nash and Stevenson argue that this single-minded pursuit can lead to burning out, however. A single goal, such as putting all your psychological energy into becoming a winning trader, cannot satisfy all of a person’s complex needs and desires. Many people see success as a tug-of-war between achievement and happiness, but it’s necessary to address both aspects and a couple more.

Drs. Nash and Stevenson studied hundreds of high achievers who maintain lasting success. They share a set of common characteristics. They make a positive difference and enjoy the process of their endeavours. They also have a complex, in-depth understanding of success, and what success really means. By understanding the factors that produce lasting success among high achievers, you can apply this framework to trading, and strive to achieve long-lasting trading success.

Lasting success is emotionally renewing, not anxiety-provoking. It isn’t about pursuing a goal for monetary rewards. Enduring success has four components. First, successful people feel their work is pleasurable; they feel content. Second, they believe that their efforts accomplish something; they feel as if they are mastering a set of challenging skills.

Third, they feel they have made a positive impact on people they care about, and fourth, they believe they are creating a legacy; their efforts will somehow help others also find success. Nash and Stevenson argue that unless all four components are addressed, one doesn’t feel that their success is real. They will experience what Drs. Nash and Stevenson call the “wince factor.” That is, you may feel that you are going in the right direction, but you won’t truly feel successful. You’ll be preoccupied with trying to satisfy components of success you have ignored.

How can traders address each of the four components? Let’s consider a few suggestions. First, you must view trading as pleasurable; you must enjoy the process of trading, and be motivated by the inherent satisfaction you receive from trading. You can’t be overly consumed with the potential monetary rewards. Second, you must focus on how trading requires mastery of a challenging skill. You must feel that as you build up your trading skills, you are continuing to master even more difficult challenges. Many traders can easily address the first two components of enduring success. But the second two components, significance and legacy, can be a little more difficult to address. Although one can make the argument that trading is socially significant because traders provide liquidity, we’ve found in our studies of traders that many find this argument weak.

Many traders want something more. One solution to the problem is to donate some of their winnings to charities so that they feel that they are using their talents as traders to make significant contributions to society. Creating a legacy as a trader can also be difficult. Many traders, however, find that they can create a feeling of significance and legacy by becoming trading instructors or trading coaches. By helping novice traders learn the ropes, they feel they can significantly contribute to the benefit of others and feel they are building a legacy by helping train a new generation of traders.

Drs. Nash and Stevenson present an interesting framework for understanding the factors that contribute to maintaining long-term success. As a trader, it’s in your best interest to make sure you feel your trading activities are pleasurable, challenging, significant, and help you create a legacy. If you address each of these issues, you’ll be able to maintain the enduring success you deserve.

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