“Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money” -Ed Seykota
I’m a rules-based kinda guy. It’s both a blessing, and a curse. A few years back, I had a trade on that was too large, and when I woke up and watched the market open, it had started to seriously teeter in the wrong direction. D’oh! In one of those perverse moments of either self-flagellation or camel-like stubbornness, instead of closing the trade, I went for a long walk on our city’s seawall. I think I had a cookie, too.
My computer may have been closed, but the market certainly wasn’t. Three hours later, things had gone from crummy to crummier. I closed the position. Why hadn’t I closed it earlier? And for that matter, why had I even let a trade like that happen in the first place? That would be a longer post, or require a couch and mild hypnosis to fully answer. The short answer probably is a temporary combination of #4 and #6.
You would think the only reason to trade would be to make money. You would be wrong. Here are some of the more prevalent reasons traders hit the buy and sell buttons:
- For the adrenaline rush
- Out of boredom
- To feed a gambling addiction
- To punish themselves
- To punish others
- To feed an ego
- To feel better about themselves
- To feel worse about themselves
- Out of loneliness
- Out of greed
- Out of fear
- To numb pain
- To feel pain
- And finally, the few that remain, trade to be profitable.
Something to keep in mind the next time you either ask for someone’s advice, or they offer it to you unsolicited.
Last Summer I got into a bit of a twitter-scuffle with someone because I had mentioned that the only reason I trade was to make money. I summarily received a lecture on why that was a pitifully shallow reason. My clarifications that making money is most certainly not my sole reason to rise in the morning, just my sole reason to enter a trade – and that trading is a small part of my life – fell unheard.
As I said, people trade for lots of reasons.
Why are you trading? Drop me a line at firstname.lastname@example.org