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One of my clients asked me a really interesting trading question this week which was hugely insightful and really made me think.
He said to me that reading Market Wizards showed him that focusing on the money is bad for your trading, but at the beginning you usually get interested in trading because of the money. So how then do you remove money as a motivator – and should you even do that?
Learning about this had a HUGE impact on my trading consistency and reduced my stress levels dramatically so since it came up I wanted to share it with you…
The thing about money is that we all think we want more money right? But the reality is that is an incomplete thought. Really we want more money so that we can………….
Now when you read the previous sentence, chances are you filled in the blank already for yourself. There are three ways to fill in the blank:
- “Stuff” … I want more money so that I can buy a new car
- “Experiences” … I want more money so that I can spend more time with my family
- “Feelings” … I want more money so that I can FEEL safe / happy / confident
When you complete that statement for yourself, if you completed it with either Stuff or Experiences, try taking it one step further by attaching the feeling you want:
- I want a new car so that I can feel free
- I want to spend more time with my family so I can feel happy
When you look at it like this, the money is only an intermediary goal. It is an enabler for a feeling that we want to get more of in our life.
As soon as you realise that money is not the end game, it becomes far easier to remove the focus on money in your trading…money becomes a mechanism for keeping score / measuring progress and that it is it.
So what SHOULD you focus on if it is not money?
The answer is to figure out the ACTIONS that will cause the thing to happen that gives you the FEELING that you want. For example, if you want to have more money so you can spend more time with your family (instead of working every day), so that you can feel happy…the actions that will generate that are trading well, following your rules, managing your trades according to your trading plan.
Doing these things will automatically start to make you feel happy because you have associated them with getting you the outcome you want!
So the fantastic thing is, you may have started trading to get more money to spend more time with your family, so you can feel happy…but because you have started, you will feel happy NOW, even though the money may not have arrived yet!
The great thing about that is they are actions you can do and reward yourself for every day, whereas making money does not happen every day (nor even the majority of days!).
So by adopting this approach you get to feel happy every day rather than only feeling happy when your account goes up.
And THAT makes trading enjoyable!
Founder – Enlightened Stock Trading