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The Fatal Attraction to Trading
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Profits: By Justin Paolini
Posted on September 3, 2018 by Forexsites in General with 0 Comments
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In my experience helping retail traders succeed, I have come to

understand that the pursuit of money is one of the main impediments.
When asking aspiring or struggling traders why they want to trade, 80%
of the time the reply I get is: to make money.

Today we’re going to reflect on the goal of making money, using a rather
extreme example which should help you understand why any warm
feeling for money is a fatal attraction.

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Case in Point: Lottery Winners FX Tweets

“The goal of a successful trader is to make the best trades. A Twitter list by @forexsites

Money is secondary.” – Alexander Elder

Trade Charting
@tradecharting
Most people are attracted to trading for the wrong reason: to make
$MAT: another descending
money. I don’t have statistics on this, but I’m willing to bet that the “goal”
wedge that is making good
of making money is probably one of the most common reasons for progress.
burnout, stress, and a whole other array of psychological disorders. twitter.com/tradecharting/…
https://twitter.com/tradecharting
But today let’s look at this from another angle and see what kind of /status/1320174816138162176

happiness and joy lottery winners obtain after they hit the jackpot! For a
moment let’s forget that the actual economics of the lottery and take a
peek into how people’s lives change when they reach the objective of
becoming rich.

This article from Business Insider should be a cautionary tale for all those
14h
seeking immediate gratification or quick riches. The key concept is this:

Trade Charting
receiving large sums of money can be the worst thing that ever @tradecharting
happens to you.
$LB: another Descending
Wedge b/o that is making
Here’s why. In order to get anywhere in life, you need to grow through decent progress. IMHO: they
your trouble and not throw money at it. Throwing money at problems are one of the highest
rarely solves them. It can frequently make them worse. Moreover, without probability chart patterns of
them all!
having grown your bank account with your own efforts, you will lack the
discipline and insight to actually manage the money successfully.
Embed View on Twitter
It happens in trading as well. I’ve met a handful of retail traders that
made a fortune with oversized bets in a strong trending market, without
having the skills to recognize that:

they were taking outsized bets (often 5-10% of equity on each single
trade);
they were doing well only because of a particular catalyst that was
delivering abnormally strong momentum;
by focusing on the money they were making, they never questioned
their actions.

Inevitably they gave it all back, and more, just like most lottery winners
do.

Money Cannot Buy Happiness

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Success isn’t defined by your wallet. It’s defined by waking

up with a smile on your face, knowing it’s going to be a great
day. – Mark Cuban

Know this. There’s a difference between being rich and being wealthy.
You can be rich yet have to work 10 hours a day and not be able to enjoy
your life at all. Vice-versa, you could be making much less but be in a
situation that allows you to spend time with your family, with your
children, and actually enjoy life. That’s the meaning of “wealthy” and you
don’t have to be rich in order to experience that kind of lifestyle.

Yet most people have some kind of financial threshold that holds the key
to their “happiness”. How far from the truth they are. Money can help you
reach your goal, but it cannot be the goal itself. There is a subtelty here
which can be life-changing if you understand it:

happiness is to be found in the pursuit of your goal – not in

reaching your goal.

It’s the difference between trading for money/profits and trading because
you genuinely like the markets or are interested in economics or how the
world works. Only if you actually appreciate and enjoy working toward
goals and dreams, are you on the right path. The goal should be aligned
with your talents, with what you’re naturally gifted with – and not a means
to an end.

I like these questions posed by Dr. Brett Steenbarger because (if you
answer them honestly, after having traded the markets and knowing your
natural inclinations) they do help in understanding whether you should
actually pursue trading or not. Give it a try (these questions also
appeared in Michael Covel’s book Trend Following):

1. When something goes against you in the market, do you often find
yourself venting your frustration?

2. Do you enjoy (or as a child did you enjoy) roller coasters or other thrill
rides?

3. Do you often find yourself procrastinating over work?

4. Do you consider yourself moody—sometimes rather up, sometimes

rather down?

5. Would you generally prefer going out and partying with friends rather
than staying at home with a good book or movie?

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6. Do you often find yourself apologizing to others because you forgot to

do something you were supposed to do?

7. Are you generally high-strung, tense, or stressed?

8. If given the choice at a buffet, would you prefer to try exotic foods
you’ve never heard of rather than familiar dishes?

9. When you have a task that needs to be done around the house, do
you tend to take a quick and dirty approach, rather than a meticulous,
painstaking approach?

10. After a losing trade, do you often feel guilty or get down on yourself?

11. Have you experimented with or regularly used two or more

recreational drugs (other than alcohol) in your life?

12. Are you often late for appointments or for social plans you’ve made?

The best traders have a high conscientiousness, low neuroticism, and

low openness. A good trend follower sticks with rules and systems
(conscientious), won’t impulsively enter or exit trades on the whim of
emotion (neuroticism), and will trade for profits, not stimulation (low
openness).

Dr. Steenbarger describes the outcome as such:

If you indicated “yes” to most or all of questions 1, 4, 7, and 10, you

most likely score high on a trait called “neuroticism.”
Neuroticism is the tendency toward negative emotional experience,
and it shows up as anger, anxiety, or depression.
If you responded “yes” to most or all of questions 2, 5, 8 and 11, you
probably score high on a trait called “openness to experience.”
Openness reflects a tendency toward sensation seeking and
risktaking.
If you answered “yes” to most or all of questions 3, 6, 9, and 12, you
potentially score low on a trait called
“conscientiousness.” Conscientiousness measures the degree to
which an individual is oriented toward duty, responsibility, and
dependability.

Remember that the best in the business are some of the least flashy
people, to the point that one of my current contacts is nowhere to be
found on the internet! They are meticulous and conscientious about their
work, and they don’t let their emotions or needs pull them astray.

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Over to You
“People with a household income of less than $10,000 a year who play
the lottery spend $597 a year on tickets,” according to the New York
Times. They buy lottery tickets because it’s fun — a brief hope break in a
dreary day.

The key here is to NOT wait until you reach some financial objective
before living your days differently. Dreary days are only as dreary as we
make them. Start looking at what you have, instead of what you don’t
have. Consider shifting your career in alignment with your natural gifts
and talents. Basically, start making more mature decisions NOW and
look at what you have, and the resources you possess, instead of what
you don’t have. Usually all it takes is a change of perspective, in order to
get onto the right path.

And for those of you that possess the right personality traits, know this:
the odds of winning the lottery are much lower than the odds of a
successful trading strategy. But to reach the point where you can execute
a strategy with consistency, many hours (months) of hard work are
necessary.

That’s why you must also enjoy the trading process, not just the trading
profits.

Good Luck.

About the Author

Justin is a Forex trader and Coach. He is co-owner
of www.fxrenew.com, a provider of Forex signals from ex-bank and
hedge fund traders (get a free trial), or get FREE access to the Advanced
Forex Course for Smart Traders. If you like his writing you can subscribe
to the newsletter for free.

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