WHY are You Trading?

There are many reasons why people aspire to master the art of trading. For some, it is the appeal of financial freedom. Others may have grown tired of the daily grind and like the idea of being their own boss.  Whatever it is, it is important that your reason is compelling enough to help you stay focused as you learn and improve your trading skills. In this post, we discuss why it is important to know “WHY” you’re trading, and also look at some of the common “WHY”s shared by traders who have achieved lasting trading success.

Knowing “WHY” you choose to trade is important because this will give you a driving sense of purpose. Having a strong sense of purpose propels you towards your goals and helps you overcome obstacles along the way. Trust us, there are a lot of obstacles in trading! Some of these are technical in nature and easier to overcome, but there are also obstacles (usually psychological ones) that will challenge you and make you question who you are as a person and as a trader. 

It is an often quoted saying that “95% of traders go broke and only 5% survive.” While it is hard to pinpoint the exact figures, it is not inaccurate to say that only a small minority go on to achieve trading success. The most obvious factor that separates the minority from the majority is their drive to only select the best trades in accordance with their trading strategy. In short, successful traders give themselves enough time to learn how to trade because they have compelling reasons to be trading for the long-run. Here are some common reasons which help give them a sense of overarching purpose:  

1. Fascination with markets - This is otherwise known as the “love of trading”, and implies a deep interest in the workings of price action and financial markets.  
2. Family – Some people trade because they want to secure a future for their children. Such traders want to give their children opportunities they themselves may not have had growing up, and therefore will do anything to be successful.
3. Lifestyle (Freedom) – Trading allows you to be your own boss. Having freedom to choose the hours you work and create a desirable lifestyle can also be a big motivation for some.

Successful traders may cite one of these, or a combination of all three as the most compelling reason they learnt to trade and stay-in the game. Notice how not one of these reasons is to make money? While money management is an indispensable component of trading, caring only about the bottom line will not help you achieve lasting trading success.

Now it’s your turn to ask yourself these questions: Why are you trading? Will your “WHY” get you where you want to be in the long-run?

Happy trading!

Regards,
The TWP Team