How many hours do you spend on trading each day? Do you find it difficult to peel your eyes away from your candlestick charts? Have your family and friends said you live and breathe the market? Are you passionate or addicted?
In a game of odds like trading, there’s a fine line between passion and addiction.
Both passionate and addicted traders can do well in the markets. But addicted traders usually do so at the expense of other facets of their life. They become obsessive and are driven by the fear of failure more than the enjoyment of their passion.
Passionate traders can sustain their market success.
Addicts go through highs and lows that eventually wear them out.
How do we make sure that our passion for trading does not go awry?
According to The Passion Paradox by Brad Stulberg and Steve Magness, the solution lies with a critical concept: harmonious passion.
Harmonious passion involves building a mastery mindset. It also means engaging in an activity for its intrinsic rewards.
For a trader, this means that you’re enjoying the process of analyzing the market and trading. You relish the process of improving continuously as a trader. You are not driven by external rewards like fame or money or the fear of failure.
How can you develop a harmonious passion for trading?
According to The Passion Paradox, there are three practical ways to do so. While these methods are not specific to traders, you can quickly adapt them.
Here, let’s see how we can apply them to cultivate a healthy and sustainable trading passion.
#1: Process Over Results
This principle is directly applicable to trading.
Trading is probabilistic. Hence, in the short-run, results are unreliable indicators of success.
It makes perfect sense that traders should focus on the process. And the starting point for this is your trading plan.
Celebrate small wins like another trade taken in line with your trading rules. Remove your obsession with profitable trades.
As a trader, there’s an inevitable rollercoaster ride waiting for you.
The ups and downs of the market.
The feeling of taking a step forward followed by three steps back.
The immense frustration.
Being too eager for success makes you an easy target for quick fixes. Think trading scams and magic indicators.
On top of that, patience has other benefits for traders.
#3: 24-Hour Rule
Have you suffered from hubris after a winning streak? Or started revenge trading after a series of losing trades?
If so, the 24-hour rule is a concrete recommendation that will help you.
This rule mandates a cooling-off period. This simple rule works well to put your winning and losing streaks in perspective.
Simply walk away from your screen and ponder.
If you have been revenge trading, this might just be the magic bullet you need.
Trading Passion Or Addiction?
The principles above apply to any endeavor.
But trading the markets usually means committing yourself financially and emotionally. These high stakes come with a strong tendency to consume the trader.
Upon reflection, I realized that I was obsessed with trading when I first started trading. If I had been more aware back then, I could have taken more conscious steps to snap out of it. On a personal level, I would’ve benefited greatly.
Do not focus on the goal of becoming the best trader.
Instead, enjoy the journey of becoming a better trader.
(In this article, I’ve mentioned that you should not try to trade for a living unless you enjoy the process.)
Ultimately, you’re responsible for your trading journey.
The Passion Paradox contains incredible insights to understanding passion. If you are serious about trading (or any other activity) and want to apply your passion towards it in a sustainable way, read it.