What motivates you?
I’ve been talking for quite some time that the purpose of trading isn’t about the money. When I say that I often get a look from traders akin to placing my head on the coffee table and continuing the conversation. Impressions aside, I’m on record having promoted this thought for a while. Money is Not The Focus of Trading, and my thoughts on Money Management are just a couple of the posting I’ve had on the subject.
The core of the issue isn’t that trading should be an academic exercise. We absolutely want to be profitable at this venture, even if for no other reason than to trade for another day. The issue is that 98.5% of coaching in the trading world is focused on only making money and less than 2% is on what motivates you to trade. Humans are very complex beings. We’ve evolved beyond the primal need of food, shelter and procreation to want happiness in our lives, to have a sense of purpose, fulfillment and satisfaction beyond the bottom line. Study after study has shown that humans need more than just the monetary reward.
To provide some evidence of this, I found a presentation from David Pink on his bestselling book Drive where he discusses some of the science around what motivates people in the work place. Even though his discussion relates to workers in organizations, the underlining information is valid for self-directed traders.
To paraphrase Mr. Pink, finding your purpose is key to your success in the markets. Most traders that I work with are pursuing trading as an avocation. Therefore, trading needs to fit into their lives and not the other way around. Defining the purpose of your trading is the first step in becoming a profitable trader.