Why do you trade? What motivates you? To many traders, the answer is obvious. We trade to make money. Many traders, however, say that they would trade even if they merely earned a livable wage. For example, many traders in “Market Wizards” said that they initially took any job in the financial markets just to be around the action. Money wasn’t the only motivator. Trading provides intrinsic rewards.
We asked one seasoned trader, for example, if he would trade if he didn’t earn much money at it. He said, “I’d probably still do it. It’s so interesting. I think it’s a lot better than punching a clock somewhere. I find the game itself interesting. I enjoy watching how stocks react to the news.
It’s always amazing to me how you can see small movements snowball into large herd mentality sorts of movements. A minor piece of news starts some selling, and then all of a sudden, there’s more selling and more selling, and then there’s a huge avalanche of selling. And it all started with just a minor piece of news. But then at other times, it won’t do that. I find that very interesting.”
Another seasoned trader says, ” I like the freedom trading gives you, the ability to earn a living while not having to have employees, the mental challenge, and the constantly changing environment.” There are many reasons to pursue trading, and money is usually not the only reason. Many seasoned, profitable traders truly enjoy trading; they have a passion for understanding and mastering the markets.
In systematic studies, psychologists have repeatedly discovered that peak performers have a true passion for what they do. Whether it’s art, sports, or business, the folks at the top are not primarily motivated by fame, glory, respect, or status. They are driven by the pure love of the game. Winning traders, similarly, have strong interests in the markets, and this passion is the driving force that puts them at the top, year after year.
But many novice traders are drawn to the markets so as to meet deep-seated psychological deficits and needs. They yearn for respect and status. They hope that by earning huge profits, they will be able to solve all life’s problems. But trading to satisfy these motives often leads to disaster. It is vital for long-turn survival to be motivated by more than the money. Trading should be viewed as fun and challenging. You should do it because you love it. If you can, you’ll find you can trade more creatively, effortlessly, and profitably.
What motivates your trading? Do you see it as a challenge? Is it fun? Is it enjoyable? A key ingredient to trading success is the proper motivation: Be motivated by the intellectual challenge. Follow your passion for trading. Do it because you love it.