During the recently conducted first session of the educational journey, which took place in Dubai, where we are based, we tutored the students on building the grounds for the first phase of their educational journey, which would give them the best beginning to their trading education.
Identifying and defining your goals and your reasons for trading and investing in the financial market is a topic brought up as a general theme for the Pro-active investor course and in the entire application process to become a student of our online trading academy. The apparent reason for that would be to make money. That would be anybody’s easiest guess, and it’s very understandable. But have at the back of your mind that if that is your reason for trading forex, futures, or stocks you will likely experience more ups and downs than you’d like to expect.
It is imperative that every prospective forex, futures, and stock trader know the real reason they’d like to generate profits from the market before deciding to hit a button to place their first trade. This is because, even though trading and investing in its natural form is basically about buying low (in a demand zone) and selling high (in a supply zone) and applying the right risk management rules every time, the experience is one of the most emotionally draining things in the world. Because our money is on the line, it’s surprising how restless our minds can get, hence the need for a thorough trading plan to clear us of all sentiments and set us at ease for the course ahead. You would know how to trade in the most disciplined manner if you can identify and understand your goals, which would give you a significant advantage and inspire your reason to trade and invest in the financial market. In essence, a detailed trading plan will provide you with all the preparation you would need during those sentimental times of losing and winning trades. We must try to get to that robotic state of mind when we trade to eliminate every iota of emotions.
If making money is your main goal for trading, every choice you make in the market will be based on that. Alternatively, if you decide to trade as a means to generate a second income to offset personal bills and other primary needs, then you’d find yourself entering the market each day with a different viewpoint. After all, meeting family needs is all the motivation and discipline you would need. With that lack of motivation and desire to put all the necessary and much-needed efforts, you won’t have the zeal to keep pushing through difficult times in the market, which you would experience from time to time. It’s incredible how many unmotivated beginner market speculators come to the market every day with the sole purpose of only making money and not even knowing what they need the money for. Most of us want to be on our own and not have to answer to anyone and define our own work time, but it’s not a sufficient reason for some people. The real question you should have an answer to and should motivate you is, “What will you do with your life if you were given the freedom, and can you maintain a living through trading?” Having an idea of what you want to do is good, but knowing what you want and why is a different mentality.
Whenever I personally conduct an interview with a potential new Campus student, I share my grandfather’s beliefs on developing success in whatever we do. It all comes down to five simple steps:
1 – Understand your business by getting the right education.
2 – Commit to what you are doing.
3 – You have to want it.
4 – You should love doing it.
5 – Go ahead and do it!
This outline is enough to put a smile on our faces. This is relatable to anyone and whatever you aim to achieve in any business you’ve got going. It’s almost impossible to deny the plausibility and rationale of the above steps. The most successful academy students we have mentored all had their goals set in stone from the onset of their trading journey. They mostly focus on hitting their goals rather than tampering with an elaborate trading plan. They preferred to keep things as simple and straightforward as it could get and stick to their plan’s rules.
One question I like to ask candidates during the interview is, “why do you want to trade?” We understand the primary element for success is the right driving force, which is why this question is crucial because too many people fail in trading forex, futures, and stocks partially because they lack the driving force to push through certain challenging times from trading. We have already established that the apparent reason many people would want to trade is to make money. Our experience with traders that focus all their attention on making money tend to falter on their risk management rules. They think it’s ideal to hold on longer to their losing trades till it works out into a profit. They believe this strategy will help them avoid losing trades. In the end, this mentality will have a terrible effect on their trading account, and most of them will wash out without learning not to focus all their energy on only making money.
Not that making money from trading is a bad thing- it’s not. But we believe that you need to focus on what the reward of making money from successful trading and investing can bring you. It’s not the same for everyone. For some, it may mean not being a financial burden on anyone else and being able to provide for their family’s needs at all times and lead a decent livelihood. They’d also have more time for themselves and their family. For the rest, it may mean touring the world, engaging in philanthropy work, sending their kids to good schools, etc.
Many people have a mistaken belief that you don’t have to answer to anyone in trading and that you are your boss without being responsible for anything. This is false because successful trading can only be achieved through robust efforts, persistently sticking to rules, and coming out of our comfort zones. When traders face this reality, many of them will fall by the wayside because they depend on easy money-making schemes and short-cuts, which won’t get them very far.
Consistently profitable traders are very spirited individuals who delight in being challenged. Being consistently profitable as a trader and investor in the financial market is one of the most demanding responsibilities you will ever experience, and it’s one of the most intriguing things about trading for us. Also, the fact that there aren’t any restrictions in trading in terms of profit gains is immensely appealing. The trading world is void of any restrictions, unlike most jobs. The excitement of speculating the market is another aspect of trading that’s enough to influence anyone looking for that “action” to start trading. The prospect of a “big win” makes these individuals fund their depleted accounts repeatedly till their trading capital is exhausted.
Our motto here at our online trading academy is not to make trading our life but to trade for a better life. The statement is enough to capture the good things trading has to offer and what we can avoid.
Tell us during your interview!
What inspires you to get out of bed every day in the morning?
What excites you?
What kind of activities do you enjoy?
It would be best if you made trading a means to an end, as it should be. It won’t work unless that end has to be specific and must be ingrained in something pleasurable.
The reasons you trade can change if you instead focus on the reward and not the risks involved in trading. Therefore, you should discover motivation for yourself, set goals, assemble a road map to get you to your destination and, chase it.
We hope this blog has ignited that inner level of focus for you and fuelled a cause to consider other reasons to want to trade besides for the sole purpose of making money.