One of the great challenges of trading is that it requires intense and singular concentration on markets, but also an equal focus on one’s performance in those markets. That combination of market awareness and self-awareness enables traders to make the most of their “edges” in markets while also cultivating fresh sources of edge.
It is interesting that very successful traders usually don’t achieve monetary success and then walk away from markets. That is because what drives them is not just the outcome, but also the process: the ongoing challenges of market mastery and self-mastery. Even after the money has been made, the game retains its appeal.
If your motivation is primarily to make money, you probably won’t get to the point of career success, because the inevitable periods of drawdown will sap whatever drive is present. When the motivation is mastery, losing periods provide fuel for reflection, learning, and improvement.
Archives of “Experimental psychology” tag
rssThree motivations For Traders
There are three motivations behind taking a trade: monetary reward, educational reward, and/or psychological reward. The first pays the bills, the second will pay the bills, and the last will prevent you from paying the bills.
Whenever I feel the pull of psychological reward, I have the voice saying “do you want to be a trader?” Letting go of the psychological need to take a trade or be right, is hard. Our brain does not know what money is. It listens in terms of chemical releases. Letting go of psychological reward is not easy. It is the most instantaneous form of reward.
The best way I know to give psychological power to money is to make a habit of seeing money as opportunity. Opportunity for financial freedom and opportunity to make another trade. The brain understands opportunity. This needs to be in balance as well.
If you are feeling the psychological pull, take a few seconds and answer the following. (more…)
Persistence -Self Discipline
Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “Press On” has solved and always will solve the problems of the human race.
– Calvin Coolidge
Persistence is the fifth and final pillar of self-discipline.
What Is Persistence?
Persistence is the ability to maintain action regardless of your feelings. You press on even when you feel like quitting.
When you work on any big goal, your motivation will wax and wane like waves hitting the shore. Sometimes you’ll feel motivated; sometimes you won’t. But it’s not your motivation that will produce results — it’s your action. Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results.
Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating. (more…)