Better to be Rich or Wealthy?
Hi all, time to climb back upon the soapbox,
You will remember I let you all know the reasons why I trade last month in an article you can read here. I thought it was important I wrote this publicly for two main reasons, one, so you all get an insight into what makes me tick and my true motivations, and two, to remind myself why I got into this caper in the first place. If you haven't thought about this for yourself, I really recommend you do it, it will ensure you do not become too reckless.
In that article I wrote three main motivators for me trading, to escape the rat race, for my young son, and to realise a lifelong dream of helping the disabled. All these are very genuine and truly are real motivators for me, but let's not kid ourselves either, most of us are also in it for the copious amounts of money that can be made. After all, none of the motivating factors I list can be acheived without a substantial sum of money, and despite the purity of everyones intentions, no-one would say no to a million dollars would they?
To many being rich, and being wealthy are one and the same things, to me they are two different entities all together. To be rich is to have many zeros at the end of your bank balance, an overly expensive house, two boats, a car, a wife named fifi, and very little direction. To be wealthy is to have enough money to live the way you wish to (yes even a wife named fifi if you desire), while having enough money to branch out and acheive your life goals. The difference? not the money, the bank balances may well be identical, the difference is life direction.
With this in mind, it is great idea to plan your trading around those life goals. It is easy to say "how many pips do I need to make a million dollars", but is a million dollars enough for your goals? or is it too much and you are just putting too much pressure on your trading day? Do you get my drift?
Let me give you an example, I have just completed my goal setting for the trading year, my aim by the end of the year is to be working part-time and trading full-time, for my wife not to have to go back to work and for us to be in a position to buy a house. At first this sounds daunting, and possibly an unrealistic target (which it still may be). However when I broke it down, it equates to around an average of 20 pips every trading day, certainly within the realms of possibility, considering I average around 30 pips a day at the moment.
So when you are planning your trading goals (you are going to right?), think about where you want to be at the end of the year, then work out what that will cost, not the other way around. If you do this, you could avoid a bunch of pressure that wasn't needed, why go for 100 pips a day when all you need is 20? Why put that pressure on yourself when you didn't even need those extra 80 pips anyway?
Best of luck with the year, if you are comfortable, leave a comment under this post with your goals, it would be great to hear why others trade.
Happy trading!
You will remember I let you all know the reasons why I trade last month in an article you can read here. I thought it was important I wrote this publicly for two main reasons, one, so you all get an insight into what makes me tick and my true motivations, and two, to remind myself why I got into this caper in the first place. If you haven't thought about this for yourself, I really recommend you do it, it will ensure you do not become too reckless.
In that article I wrote three main motivators for me trading, to escape the rat race, for my young son, and to realise a lifelong dream of helping the disabled. All these are very genuine and truly are real motivators for me, but let's not kid ourselves either, most of us are also in it for the copious amounts of money that can be made. After all, none of the motivating factors I list can be acheived without a substantial sum of money, and despite the purity of everyones intentions, no-one would say no to a million dollars would they?
To many being rich, and being wealthy are one and the same things, to me they are two different entities all together. To be rich is to have many zeros at the end of your bank balance, an overly expensive house, two boats, a car, a wife named fifi, and very little direction. To be wealthy is to have enough money to live the way you wish to (yes even a wife named fifi if you desire), while having enough money to branch out and acheive your life goals. The difference? not the money, the bank balances may well be identical, the difference is life direction.
... is a million dollars enough for your goals? or is it too much and you are just putting too much pressure on your trading day ...
With this in mind, it is great idea to plan your trading around those life goals. It is easy to say "how many pips do I need to make a million dollars", but is a million dollars enough for your goals? or is it too much and you are just putting too much pressure on your trading day? Do you get my drift?
Let me give you an example, I have just completed my goal setting for the trading year, my aim by the end of the year is to be working part-time and trading full-time, for my wife not to have to go back to work and for us to be in a position to buy a house. At first this sounds daunting, and possibly an unrealistic target (which it still may be). However when I broke it down, it equates to around an average of 20 pips every trading day, certainly within the realms of possibility, considering I average around 30 pips a day at the moment.
So when you are planning your trading goals (you are going to right?), think about where you want to be at the end of the year, then work out what that will cost, not the other way around. If you do this, you could avoid a bunch of pressure that wasn't needed, why go for 100 pips a day when all you need is 20? Why put that pressure on yourself when you didn't even need those extra 80 pips anyway?
Best of luck with the year, if you are comfortable, leave a comment under this post with your goals, it would be great to hear why others trade.
Happy trading!
This entry was posted
on Tuesday, January 17, 2006 at 1:55:00 PM.
You can skip to the end and leave a response.
Posted byTuesday, January 17, 2006 9:44:00 PM
My goal is trade for living with forex and earn consistently every month. But still in learning stage for me. :D
Posted by
Wednesday, January 18, 2006 6:52:00 AM
Quote: If you do this, you could avoid a bunch of pressure that wasn't needed, why go for 100 pips a day when all you need is 20? Why put that pressure on yourself when you didn't even need those extra 80 pips anyway?
Striving for a goal that seems impossible is what makes us become better! Why do you want to achieve just enough? Why not reach for something better than you are?
Say you are currently making 30 pips a day, when you only "need" 20. What if you try to make 100? Assuming you don't take greator risks why not try for 100? What if it earns you an extra 5 pips a day? 5 pips is still 5 pips. If you don't want that money you can donate it to help the disabled.
Posted by
Wednesday, January 18, 2006 8:50:00 AM
You make some interesting point driverdan, and I can see where you are coming from. The biggest danger to a traders account in my opinion is emotion, if you set unrealistic goals, desperation can set in and you can start "chasing" trades, trying to catch up. By default there will be weeks you make much more than you aim for, this week for example I made 165 pips on Monday alone, as you can never pick where a move may end, you say "Assuming you don't take greator risks why not try for 100?" ... if you are good enough that 100 pips is realistic for you then for sure go for it, but when you start try to acheive targets that are overly ambitious week in week out, if you start falling behind, then greater risks are taken, when perhaps that pressure wasn't needed.
Still each to their own, I like to ease the pressure to keep myself calm and clear headed, others may thrive on it :) Best of luck!
Posted by
Wednesday, January 18, 2006 11:37:00 AM
I think you have got the theme of my article perfectly pkffw, and best of luck with your goals, looks like we will both be buying houses with any luck ... ill look for you next door ;)
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