While trading is undoubtedly about making money, the dream is to achieve financial success, live our chosen lifestyle, and enjoy the freedom that trading brings.
Nearly everyone enters trading with the ambition to improve their financial situation and lifestyle. These aspirations are entirely valid and achievable if you dedicate yourself to studying, honing your skills, and preserving your bankroll long enough to reach profitability.
However, to succeed, we must set these life-changing dreams aside temporarily and focus on what will truly get us there. We need to be smart, realistic, and cut through the noise. You will only become a successful trader if you approach it for the right reasons. Many traders, especially beginners, are not initially motivated by the right reasons…
Do You Love the Money or the Process?
Do you truly love the process of learning about markets, studying charts, and trading? Do you genuinely enjoy it? Or are you just going through the motions because you believe you can make quick money? For most traders, especially beginners, the honest answer is the latter.
In trading, as in any business endeavor or aspect of life, if you aren’t in love with the process, you will rarely achieve your goals. Read that sentence five times before continuing.
So, how can you make an honest assessment of whether you are in love with the money or the process of trading?
Signs You’re Trading for the Wrong Reasons
- Trading Money, You Can’t Afford to Lose. If you’re risking money you can’t afford to lose, it indicates you’re too focused on the money. People who trade with funds they cannot afford to lose are often driven by the desire to make money quickly, ignoring the possibility of loss. Bottom line: don’t trade with money you can’t afford to lose.
- Obsessing Over Money, Not Trading Strategy. If your thoughts are only about making money rather than focusing on your trading plan or strategy, you’re missing the point. Trading should be about the process, not just the money. Money is simply a way to keep score in a game that tests your discipline and patience. Ironically, focusing too much on the money leads to losses.
- Dreaming About Future Rewards. If you’re already planning what you’ll do with the money you make from trading, you’re too focused on the rewards and not the risks. While it’s good to have ambitions, they shouldn’t consume your thoughts. Making plans for money you haven’t earned yet indicates your trading mind-set isn’t right.
- Trading Compulsively. If you find yourself trading constantly, even late at night, for the rush rather than for strategic reasons, you’re likely developing a trading addiction. This behavior will quickly drain your bank account.
- Chasing the Next Big Thing. If you get excited about the latest trading trends, like cryptocurrencies (which can be highly speculative), you’re setting yourself up for failure. Stick to major markets, major Forex pairs, major stock indices, and commodities. Trading too many markets can lead to over-analysis, over-trading, and losses.
The Right Reasons to Trade
- Passion for Trading. You should trade because you genuinely love trading. If you don’t enjoy the process itself and only focus on the end goal, you’ll never reach it.
- Methodical Approach. When you become methodical and well-structured in your approach, making plans, keeping notes, and maintaining spreadsheets, you’re taking trading seriously. Being methodical, having a trading plan, and keeping a trading journal are habits of traders who truly enjoy the process. These practices keep you accountable and help develop proper trading habits and routines.
- Immersion in Markets. If you live and breathe markets, it’s a sign you’re in it for the right reasons. Every free moment, you’re reading blog posts, studying classic trading books, or analyzing charts.
- Love for Self-Improvement. Trading is fundamentally about self-improvement. Intense discipline, focus, passion, and patience are crucial not just for trading success but for life success as well.
- Competitive Nature. You enjoy the competition. The idea of competing with millions of other traders and striving to be in the top 10% who make the most money drives you. It’s not just about the money; it’s about the self-confidence and satisfaction of knowing you outperformed other traders. This achievement puts you in a select group of top traders, which is a significant accomplishment.
- Enthusiasm for Markets. You have a genuine love for markets, charts, business, and entrepreneurship. You enjoy studying what drives the world economies and find yourself watching financial news, like CNBC or PBS Nightly Business Report, even when you’re bored.
Conclusion
To get fit and healthy and achieve your ideal body composition, you must fall in love with the process of working out and eating healthy. Without this love, you won’t consistently do the small daily actions necessary to reach your goals. The same principle applies to trading. To attain the financial success and lifestyle you desire, you must love the process, the details, and the discipline required. As they say, the devil is in the details.
To succeed in trading, you must let go of the need to control the outcome. Trust the process, trust your intuition, and trust yourself. Falling in love with the process is essential to achieving the results you seek.
If you’re not yet feeling this or practicing the habits discussed above, don’t worry. Stay engaged with inspirational and educational content and daily market analysis. Soon, you’ll find yourself enjoying trading more and hungrier for knowledge each day. Momentum builds momentum, and turning your desires into habits is key. Habits lead to success, and by developing a proper trading routine and sticking to it, you’ll cultivate the habits that pave the way to trading success.