Thursday, January 30, 2020

What Motivates a Successful Trader

The quest for self-esteem is the surest sign of its absence, as Ayn Rand once observed.  The motivation of unsuccessful traders is to become a success.  As the recent Forbes article points out, that ego-based motivation makes us vulnerable when we face inevitable losses.  This is the problem with what Maslow called deficit motivation.  When we seek something to fill a perceived void within us, any disruption thrusts us back into that void.  For example, if I feel unlovable and unworthy, I may desperately seek companionship in relationships, but how much will I have to give to those relationships?  How well will I be able to navigate challenges in those relationships?  If what two people bring to relationships are gifts, they naturally support each other and benefit from their interactions.  If two people merely bring needs to relationships, they are always taking from one another and cannot tolerate situations where the other cannot give.

All traders have relationships with the markets they trade.

How well would *your* romantic relationships and friendships go if you interacted with your partner and friends the way you interact with markets?  Great relationships bring strengths to interactions.  Barren relationships bring needs.  When we bring our needs to our trading, those color our decisions, and our relationships with markets become barren.

A great way to identify beginning traders with promise is to focus on the promise they have fulfilled in other areas of their lives.  Such traders bring developed strengths to their learning curves.  Less promising traders are looking to become successful.  They are not looking for self-esteem; they're not seeking to leverage existing successes and strengths.  When I hear a trader talk about their "passion" for trading, I ask about the other passions they are currently fulfilling in their lives.  If I can't get a concrete answer, I know that passion comes from a void desperately needing to be filled.

Trading cannot repair our damaged, bruised, or underdeveloped egos.  Just as relationships cannot provide us with the love and esteem we are unable to provide to ourselves, market cannot make us successful.  Rather, we leverage the strengths and successes that we already possess to find ways of maximizing opportunities we perceive in markets.  Many of those strengths, the recent article notes, are spiritual ones:  they come from the soul, not the ego.  What that concretely means is that there are certain ways of viewing the world, certain abilities we possess, and certain ways of acting that make us who we are and define us at our best.  The developing trader should not be trying to get rich; the developing trader should figure out ways in which he or she is already wealthy in terms of what they do well and who they are and then figure out how to express that in an approach to markets.

What motivates a successful trader is what motivates success throughout life.  Success follows from consistently being the person we already are when we're at our best.

Further Reading: