Just about everyone who enters the world of trading, even on a very limited basis, dreams of one day becoming a full-time, professional trader.
Trading for a living is certainly a worthy goal held by many talented and hard-working people. But whenever this subject comes up, I like to ask hopeful traders exactly WHY they want this to be their profession.
There are two very common answers to this question.
There’s no doubt about it, few professions can take someone from so little capital to extremely high levels of capital in such a short amount of time and with so few barriers to entry.
The stories of people like Nicolas Darvas, who turned $30,000 into more than $2 million in roughly 18 months, remind us all of just how quickly extreme wealth can be created as a trader when all the pieces fall together just right.
Plus, you don’t have to start with a ton of cash or earn some degree or cut your way through a bunch of red tape to try your hand at trading. You can start your own little trading enterprise rather quickly and cheaply.
Thus, when one considers different ways to turn a small amount of money into an extremely large amount, trading often seems like a quick and easy way to get rich. (It never works that way, of course, but that’s a topic for another article.)
The other reason becoming a professional trader appeals to so many is the promise of total freedom and self-reliance.
As a trader, there is no boss to answer to. You can trade from virtually wherever you want. There are no employees or coworkers to worry about squabbling with. You can trade from your bathrobe in the morning and then head off to the golf course in the afternoon and there’s nobody there to tell you it shouldn’t be done that way.
The appeal of this type of freedom is fueled by the idea of total self-reliance.
As a trader, you and you alone are responsible for your success. You don’t have to convince a boss or a partner that your idea is a good one. You don’t have to worry about the guy on the other side of the business deal living up to his end. You don’t have to worry about that top client of yours dropping your business at the last minute.
As a trader, only YOUR results matter. No other person or entity can stand between you and your potential for success.
That’s true self-reliance. That’s true freedom.
However, as appealing as MONEY and FREEDOM are as motivators to become a successful trader, I’ve found that they are not the BEST reasons to become a trader.
In studying the most successful traders in the world, you will find something else that drives them.
After all, money and freedom (self-reliance) can be achieved in a number of other professions. Why become a trader instead of an entrepreneur, a professional golfer, a poker player, a writer, or a musician, just to name a few options?
Success in any of these professions would certainly lead to an abundance of money and freedom. And the barrier of entry and starting capital required is in the same ballpark as it is for the wannabe trader. (The competition for success in these fields is also equally high.)
So, why trading? Why do you REALLY want to be a trader?
The best traders are driven by something other than money and freedom. They are driven by something I refer to as…
Put another way, top traders choose to be traders because they LOVE the idea of making a wealthy and self-reliant living by implementing the power of their intellect.
You will find that successful traders are BIG thinkers.
Read an interview with Ed Seykota and you’ll find that he talks more about the convergence of psychological tendencies and metaphysics than about trading techniques.
Read the Wall Street classic, Methods of a Wall Street Master by Vic Sperandeo, and you’ll find that this renowned trader turns much of his book into a manifesto on the political and philosophical virtues of Ayn Rand’s Objectivism.
Read Mark Ritchie’s autobiography, God in the Pits, and you’ll find it to be more about this legendary commodity trader’s spiritual journey than it is about his journey as a successful trader.
Notice how famous traders like Richard Dennis, George Soros, Jim Rodgers, Larry Williams, and William O’Neil are so deeply involved in politics – either as thinkers, fundraisers, writers, or active participants.
Check out James Altucher’s excellent blog and notice how few of his articles have to do with trading at all.
The point is, with very few exceptions, the most successful traders are drawn to the world of trading because they see it as one big intellectual game. They’re intrigued by the idea of being able to make a living relying only on the power of their mind.
And don’t be fooled by this “make money with your mind” concept. We’re not talking about the latest self-help fad or the lazy man’s guide to riches (“just think positive and the money comes flowing in”).
Being a great trader requires an EXTREME level of mental toughness. Few other professions will test you quite so severely and quite so regularly from a mental aspect.
If you want to be a professional trader only for the money and the freedom, you may want to reconsider. While the allure of money and freedom are excellent short-term motivators, it takes more than wanting to be rich and self-reliant to succeed in this game.
Why DO you want to be a trader?
If you’re drawn to trading because of the intellectual game that drives the markets, you’re in good company. If you’re drawn to trading because you LOVE the idea of making a living by utilizing your intellect, you’re on the right track.
Consider exactly why you want to be a trader.
And, if nothing else, be wary of the trader whose office contains more monitors than books.
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