Why do we trade? I'm sure there are many answers to that question, but it is worth asking. In my opinion (and since this is my blog, mine is the one that counts) is that the only reason to trade is to make money. If you are in it for the thrill of the action, or because you think you should be, or for any other reason other than to make money, then you should stop reading, liquidate your positions, and give some serious consideration to the issue of what trading is all about. Trading is about making money, period. There is no other answer. Making money. That's it.
Trading, when pursued for the right reasons, is freedom. The freedom to do what you want, when you want. The freedom not to have to deal with unpleasant people in order to make a living. The freedom to buy what you need and sometimes what you just want. To go where you want, when you want without anyone holding anything over your head. Trading is Freedom. (But trading is not happiness, and don't fool yourself that it is. That is an issue for an entirely different issue for a different post.)
Why do I trade? Is that a trick question? To make money of course. To pay the mortgage, to buy cars to take trips to pay my daughter's private school tuition. Trading is a business and I do it only to make money. It does interest me and I do enjoy it (so its a bonus for me that it makes money). I have always been interested in the markets. When I was a boy I would pour over the stock market listings in our local paper and follow companies I knew about. General Motors, IBM, 3M (where my father worked) were all companies which had a place in my world. I did not understand the significance of the stock market, but I did understand that shares rose and fell in price and that they represented ownership in the company. I bought my first mutual fund (IDS Income Fund) when I was 12 with some money I had earned from my paper routes and some my parents contributed. That investment was forgotten over the course of about 10 years and when it was rediscovered it had tripled in value. My curiosity was engaged. Curiosity led to reading. Reading led to interest, followed by the temporary diversion of law school. Interest led to study. Study led to my first attempt, which led to losses. Losses led the review and my second attempt, which was mildly profitable. And over the next 10 years or so, a trading style, trading plan, trading business was formed.
Read, learn, practice and when you are ready, trade. Trading to make money = Freedom.
Good Trading!
Trading, when pursued for the right reasons, is freedom. The freedom to do what you want, when you want. The freedom not to have to deal with unpleasant people in order to make a living. The freedom to buy what you need and sometimes what you just want. To go where you want, when you want without anyone holding anything over your head. Trading is Freedom. (But trading is not happiness, and don't fool yourself that it is. That is an issue for an entirely different issue for a different post.)
Why do I trade? Is that a trick question? To make money of course. To pay the mortgage, to buy cars to take trips to pay my daughter's private school tuition. Trading is a business and I do it only to make money. It does interest me and I do enjoy it (so its a bonus for me that it makes money). I have always been interested in the markets. When I was a boy I would pour over the stock market listings in our local paper and follow companies I knew about. General Motors, IBM, 3M (where my father worked) were all companies which had a place in my world. I did not understand the significance of the stock market, but I did understand that shares rose and fell in price and that they represented ownership in the company. I bought my first mutual fund (IDS Income Fund) when I was 12 with some money I had earned from my paper routes and some my parents contributed. That investment was forgotten over the course of about 10 years and when it was rediscovered it had tripled in value. My curiosity was engaged. Curiosity led to reading. Reading led to interest, followed by the temporary diversion of law school. Interest led to study. Study led to my first attempt, which led to losses. Losses led the review and my second attempt, which was mildly profitable. And over the next 10 years or so, a trading style, trading plan, trading business was formed.
Read, learn, practice and when you are ready, trade. Trading to make money = Freedom.
Good Trading!
