No one wants to lose and traders are especially prone to the need to win with additional fear of losing as it is their money that they lose. But if losing can then cause problems with the ability to win where does this leave the trader? Arianna Huffington says in her book “On Becoming Fearless…in Love, Work and Life” that “It is impossible to be fearless about money if we don’t value other parts of our lives and ourselves more than we value our bank accounts.” For the trader this could be the key to success.
It has long been noted that a trader who is driven by a need to make profits or achieve a set amount of income within a period of time usually ends up failing as the pressure overwhelms them. Too much becomes tied to each and every action they take and in the process all the makes a successful trader such as planning and strategies gets thrown out.
For the successful trader, money is just a part of the process and they are able to be objective. For many though money is not an abstract item but something that their whole psyche is associated with and indeed Ms Huffington makes the point that “it’s hard to be fearless about something that is so elemental, so wrapped up with survival.”.
This is what can then drive something referred to as ‘poverty consciousness’, i.e. the fear of never having enough money. It is this that then can drive the trader to constantly feel the need to accumulate as much money as possible but it is also the driver that can bring with it, in the words of Arianna Huffington, “gut wrenching terror” at the prospect of losing it all.
So money is the driver for many and the poverty consciousness that they carry is what they use to identify themselves and others. Money is what they see as the measure of their success either socially or professionally. Money is also what is then associated with being the key to gaining a greater level of choice, freedom and, above all, security. For others money is an object to be gained in order to cover up other perceived failings or issues in their lives.
But does this drive for money help or hinder the trader? In many respects it hinders as the need for money brings with it a fear of losing it and that is a serious issue for the trader. They must be free to follow their strategy and plans unhindered by fear that getting it wrong which would mean they lose some of the one thing they desperately need.
So how does this conflict get resolved? Well Arianna Huffington states that “True fearlessness about money can come only when we are not driven by an insatiable desire for security,” Which fundamentally means being a position that something else is the all consuming focus. That could be several things like work or family and has nothing to do with the financial capacity of the person.
For the trader this means that their driving passion is more about the actuality of trading rather than the hard cash outcome. Only then is it possible to gain the ability to have all the requirements to overcome the fear, namely optimism, nerve and passion.
Therefore what is needed is that there must be a need and life that is greater than money and have a sense of contribution and significance. This is not to say that everyone must strive to be a leader or go down in history for making a difference but more about living a life that makes a difference in their world and feel that they are making a contribution to their society – however big or small. It is this that then converts into the ability to be successful in other areas of life.
For a trader this converts into the capacity to trade fearlessly and therefore more profitably. As conversely to the trader who fails when they are driven by the need for money, the successful trader is the one who is driven by the joy of the process. They would happily trade even if there were no financial reward as for them it is the fascination of the markets, the methods, and the ability to identify a winning strategy that delivers the sense of achievement.
This then makes them more fearless when executing the trades and identifying trends that mean they need to cut their losses and exit a trade or to stick with it when the scared money driven trader pulls out. The clarity of thought in stressful market moments and love of what they are doing combine to create fearless trading and greater profits.
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