Money is a very sensitive element for most human beings, whether or not involved with trading. Money can make you excited or feel depressed in just a matter of seconds. In other words, it creates emotions like fear, greed, etc. and boosts or mars confidence spontaneously. Therefore, it is not a wise idea to see, think, or evaluate everything in terms of money.
So what’s the alternative?
Well, if your goal is to make a consistent cash flow, build sustainable wealth, then don’t think in terms of money, instead think in terms of developing skills that bring you that money. This is especially true for those involved in the forex trading business because emotions play a decisive role in making or marring your trading career.
This does not mean that money management has no role in forex trading. What is meant here is not to give over-emphasis to money.
Now some of you may feel that you do not belong to that category of traders who evaluate everything in terms of money. Hold on, and ask yourself if you frequently make any of the following statements:
- I did not reach my target profit for the day
- I am not doing good because I lost $1,000 in trading
- I am sad because I did not make the intended profit
- Despite investing $50,000, I am not gaining consistent profits
- It is a risk to invest $50,000
If you are in the habit of thinking any of these, then chances are that you are
- Thinking primarily in terms of money
- Equating your success to money
- Basing your happiness on money
- Seeing only money as investment
- Having a wrong notion that risk is all about money
If yes, then it would be a good idea to change the way you look at money. There are two healthy ways to look at money:
- As a Contributing Factor: Success is not the result of one isolated factor. It in fact is the interplay of many factors. Thinking along that line, money is just one of several contributing factors to your success. There are many other important factors like your trading skills, trading plan, your attitude, your problem solving skills, etc.
- As One of Several Indicators: Similarly, money is not the sole indicator of your success. It is just one of several indicators of your success. Sometimes you learn a few valuable lessons form a lost trade. In such a case, how can you say that you did not succeed? You gained in the form of critical insights that would define your future success.
The moment you take your eyes off money, everything becomes a lot easier, achievable and stress-free. And so, this is something you need to develop – the ability to take your eyes off money.
Understand money is the effect, the result and not the cause or the determining factor. So, thinking along those lines, losing money and gaining money are symptoms. They are not the actual cause of the problem. What is the point in focusing on the result – one on which you have no control? Why don’t instead focus on the process (which is the cause) – one on which you have good control?
Let us take an example. Imagine a situation where you are thinking like: “Oh! I am losing money trade after trade!” In such a case, you should immediately shift your focus: “My winning rate is not up to the mark. I need to check on the critical winning factors and fix the issues. Have I chosen the right pair to trade, the right market condition, the right strategy”? Focusing on such things is a lot stress-free. In this process, you identify the key areas that need intervention. And making such intervention, you make more money.
Now let us get to know someone who has actually implemented this in his life and scaled enviable heights and set 27 World Records!! Yes, you read it right – 27 World Records! And that is not all. 2 Olympic Golds and 8 World Championship victories! He is none other than Haile Gebrselassie, the long distance runner from Ethiopia.
Even though he was born to a very poor family that had to work all day long in agricultural fields to make ends meet, he never fixed his eyes on making money. Rather, he focused almost exclusively on perfecting his running skills. Even while working in the fields as a young boy, he stole the radio of his father and listened to the Olympic commentaries. Such was his dedication –he invested every minute, every second in improving his attitude, improving his skills, searching for opportunities, etc. He never thought like owning a car, owning a home, or becoming a millionaire.
Even after he became successful, he never shifted his focus from skills to money. Gebrselassie very well understood that he cannot hold on to 10,000 meters or 5,000 meters for his entire career. So midway he switched his event to marathon – This clearly shows that his way of overcoming challenges was by focusing on his skills – acquire a new skill, perfect it, and execute it with precision. With his life, he proved to all of us that that is the most comprehensive and easiest solution to overcome challenges. In short, investing in oneself is not something you can stop at any point in your career.
To quote the legend, he once said, “Money is faster than you, faster than even Usain Bolt.” (Usain Bolt is the greatest sprinter of all time).
By this, he implied that you have comparatively less control over money; what you have full control on is your skill set. His daughter attributes his success to the very consistent and hardworking approach he adopts when it comes to honing his skills.
So take cues from the life of this legend and make a paradigm shift in your focus!
