Everyone is a little afraid of losing. It’s natural. You’ve worked hard to earn enough capital to trade, and it is reasonable to worry about losing it. But winning traders are objective when it comes to trading capital. Losing doesn’t faze them. Some of the biggest winners are fearless. In her book, “On Becoming Fearless…in Love, Work, and Life,” Arianna Huffington offers advice on how to become “fearless about money.” Ms. Huffington astutely observes, “It is impossible to be fearless about money if we don’t value other parts of our lives and ourselves more than we value our bank accounts.”
Market observers have long observed that when traders need to make profits to maintain a highflying lifestyle, they usually choke under the pressure. Winning traders learn how to look at trading capital coldly and objectively. But as Ms. Huffington notes, “it’s hard to be fearless about something that is so elemental, so wrapped up with survival.” Not only are some people unable to view money objectively, they have deep seated psychological conflicts about money. For example, “poverty consciousness” is a problem for many. Poverty consciousness is the fear that no matter how much money you have, it’s never enough. The idea of possibly losing it all can “fill us with gut wrenching terror,” according to Ms. Huffington. Poverty consciousness can at times act as a motivator to drive us to accumulate so much wealth that we will never face poverty again, but many times, it is a constant source of anxiety.
For people with poverty consciousness, money takes on symbolic meaning. Money may act as a social barometer of how well we are doing, or it may become associated with security, freedom, and choices. As true as this may be, it is the root of fear. It’s hard to stay objective when significant psychological meaning is placed on money. For some people, the pursuit of money reflects a way of coping with fear. The quest for money may represent emptiness in one’s life. When money has such symbolic meaning, a person can never have enough money.
How do you overcome your fear about losing money? “True fearlessness about money can come only when we are not driven by an insatiable desire for security,” according to Ms. Huffington. Instead, a person must live a life driven by passion and purpose, regardless of financial circumstances. When you are passionate about something, it will override your fear of poverty. If you have abundant passion, abundant optimism, and abundant nerve, you will overcome your fear of losing.
In the end, our happiness depends on whether or not we find our lives meaningful, or at the very least, inherently rewarding. We must do something significant with our lives. It doesn’t necessarily have to be significant like becoming the leader of a country or an inspirational guru, but in our own way, we must make some sort of contribution. We must believe that we have our own place in the world and that it is important. Money isn’t everything. It’s the process of how we live that matters, not the prize. It is much more satisfying to pursue objectives for the pure joy of pursuing them, regardless of how much money you can make. Winning traders are motivated by the inherent rewards of trading rather than profits. It’s common to hear winning traders say, “I love trading so much that I would do it for free if I had to.” They find trading personally meaningful. The markets fascinate them. Market action is intrinsically interesting. It is a rewarding intellectual challenge to devise innovative new trading strategies, and seeing how well your ideas pan out is exciting and enjoyable, regardless of whether you win or lose. Viewing trading from this perspective can act as powerful motivators. Individuals who pursue trading in this way are more likely to feel satisfied and can more easily manage the extreme stress the market is infamous for producing. When you aren’t focused on the profits, it’s easier to stay calm and focused. The money, and possible losses, is either secondary or not an issue at all. Successful traders love the challenges the markets offer and view their work as meaningful. And because they are doing what they love, they are fearless.