Trading is a lot like life.
It’s about making decisions in the face of an uncertain future, with few rules and where you’re in full control of your actions.
Just like life, trading is what you make of it.
It can be spontaneous or planned, stressful or relaxing, opportunistic or strategic.
What’s your trading like?
What Your Trading Says About Your Life
Here’s something to consider: how you run your trading operation is similar to how you run your life.
In trading, do you always plan ahead and know exactly what you’ll be doing?
Or do you just “see how it goes” and figure things out when the time comes?
Either way, that’s probably how you’re living your life too.
Do you trade with technical indicators simply because that’s what everyone else is doing? If so, perhaps your life choices are also influenced by what everyone else is doing.
When you really think about it, you’ll start to find that life and trading have a lot in common.
Making Money
Would you say a person is living a good life, simply because he/she makes a lot of money?
I mean, there are plenty of wealthy people with poor health. Or wealthy people with no time for vacations, or to spend with their loved ones.
In life, it’s pretty clear that “making money” isn’t all there is to it.
So why is it that in trading, it’s often the only thing people focus on?
More Than Money
If our aim in life is more than just “making money”, why should our trading be any different?
In looking for a job, we don’t just consider the salary – we also consider the working hours, and how stressful the job is.
But in choosing a trading method, do we consider how stressful it may be, or how much time we’d have to spend watching charts?
Trading Can Become Just Another Job
Years ago when I first started trading, all I cared about was the money.
So I spent my time and energy on intraday trading, mostly because I wanted instant gratification, and that it was what everyone else was doing.
And it wasn’t until I found myself sitting at the doctor’s office, being told I had developed a stomach ulcer (before I was even 30), that led me to realize this was not how I wanted things to be for the rest of my life.
How You Trade Is How You Live
I’ve said many times that trading is not an activity – it’s a way of life.
There are people who are willing to sacrifice a large portion of their health and time for money, and if that’s what they want, I can respect that.
All I’m saying is that it’s not what I want for myself.
There is a better way to be trading, but it takes time.
And luckily for me, this means that I can take a relaxed, considered approach to my trading.
Gone are the days where I’d panic for hours, over a sudden 50-pip move that came out of nowhere.
At the time, I didn’t realize that trading could cost anything more than time and money – I only found out (much) later that it could also cost a whole lot of frustration and emotional pain.
So if you haven’t really thought about how you’d want to run your trading operation, take this opportunity to do just that.
How much time, effort and energy would you like to spend on your trading? I’d like to know. Tell me in the comments below.
I beleive you are right.
But some people just like to make themselves occupied, that’s why they sit in front of screens watching the price and bars. Its good for you that you know how to live your life. Lots of people don’t. They are happy to make themselves busy at least with smth.
By the end of the day we all are very different….
Hey Gina,
Yeah, people participate in the markets for different reasons. The key question is whether they’re aware of what those reasons really are.
Nice write-up.
Trading is tough on the emotions. What is especially emotionally draining is after spending so many hours in front of the computer screen, yet the trades end in losses. That’s like frustration defined. Any money earned by a forex trader is well earned. In other forms of trading businesses, you buy goods to sell; so you have your money in the form of goods in the store, cash-at-hand or in-the-bank(for sold goods), or credit(goods sold yet unpaid for). In whatever form it takes, you ideally still have your capital in place, i.e all things being equal. However, in forex its different, you set aside money to trade with, which CAN BE LOST OR GROWN. With each trade, you either make money or lose money that has been invested. This categorises forex trading as a form fo gambling business. Though it could be very rewarding!
Ak,
Absolutely. We play games of chance in our lives all the time – some for money, and some not for money.
In either case, these games will be rewarding for the player who truly understands how they are played.
Im with u Chris, money not everything slow and steady for me. Get a good plan that works and stick to it. Its certainly not worth your health and dont get to greedy. Keep up the good work.
Hi cj,
Thanks, I appreciate the encouragement. 🙂
Hi Chris
Great article! You would probably agree – Trading is at least 80% pychology (and lets assume the trader is sticking to their trading plan and rules – the majority probably dont) and yet MOST traders put far too much focus on charts, systems, signal services, black box approaches etc etc. I wonder what percentage actually bother to understand the markets are made by humans. Greed and Fear combined in the actual Buying or Selling a trade.
Thank goodness there are people like Mark douglas about trying to hit home the mental aspect of trading. The ONE thing that was holding me back.
Hey Phil,
Yeah, I agree that psychology is a HUGE component in trading that’s often overlooked (or at least, not sufficiently accounted for).
As you said your trade reflects your style of life.You are really philosopher,philosopher sees everything and every work in philosophical way.In indian language he is called VIDHVAN.
Great.
Hi Umedpuri,
Yes I’ve spent a lot (and I mean A LOT) of time thinking about trading.
Thank you very much for your kind words.
I guess you are right, Chris, that how we live is reflected in how we trade.
So if we change how we live we have a better chance of making changes in how we trade. If we are kinder to ourselves we would choose to make trading a relaxed occpation rather than a stressed and tiring one.
Easier said than done – but guess what? I think you have the answer in how to trade!
Hi Merrilyn,
Yep, it’s definitely easier said than done… but not impossible!
And it actually turned out to be easier than I thought… I find it easier to trade with a relaxed, flexible method rather than a fixed indicator-based one.
agree with you Chris…………i am having a lot of frustration and disappointment when trading without a plan…i realized now that the way i trade is more or less the reflection of the way i live my life….i learned a lot of lessen learned in life from the way i trade……thanks for sharing the ideas……………
Hi Rizal, glad I’ve made a difference.
Hi Chris I enjoy your down to earth website.I HAVE JUST COMPLETED 3 YEARS OF ON AGAIN OFF AGAIN F/X APPRENTICE-SHIP,WITH THE COST OF SOME $40 THOUSAND,PAID OUT TO THE SCAMMERS IN THE INDUSTRY.(PEOPLE BEWARE).Being 73yrs old and doing manual labour all my life and losing my lifes work in my last farming business i needed a plan (B)to fall back on.So i am just recovering from a broken leg,shoulder reconstruction and am going to start live trading f/x. What i have learned over the last 3 yrs is to combine technical/fundemental analysis ,money managemeny,self management. If theirs any other advice you wish to direct my way please do
Sincerely
David
Hi David,
If there’s one piece of advice I can give you, it’s this:
Be careful of the trading advice you get. There are many well-meaning, but inherently conflicting ideas out there. If you blindly follow them you’ll likely end up going in circles.
Trading advice should only be given (and taken) within a specific context of a trading method.
For example, most people believe that you must always use a stop loss. This is not always true. It depends on the philosophy of the trading method, and all it’s other components (money management, entry/exit criteria etc). Advice that works on one trading system may not work on another.
Examples of conflicting ideas:
1) Always let your profits run
2) You’ll never go broke taking profits too early
Both are well-meaning, but completely opposite ideas.
The bottom line: it depends on the trading method you’re looking at.
Chris,
Thanks for showing traders how to approach the market. What you are doing is what most successful traders have kept secret. However if we have the understanding that we should help the losing traders make money then we can appreciate your contribution to the growth of the financial market business.Please keep it up.