Why do we trade?
This is a very good question. Perhaps everyone's first reaction upon seeing this question is, what's there to discuss? What's the difference between this and the question "Why do we live?" Is it a complaint without cause or ineffective thinking?
But I actually believe that only those who truly understand this question will not go astray in trading and will truly have the possibility of making money.
Logically speaking, in real life, if the failure rate of a matter is 90%, you might not even start. But in trading, only 10% of people can actually make a profit, which means your probability of failure is also 90%, yet many people still rush in without hesitation. What is this for?
Of course, everyone is for the sake of fighting for that 10% probability, all for the sake of making money, and making money is also the most basic demand and purpose of trading. However, the reason why most people do not reach profitability is that they change their destination on the way to trading, and they are not aware of it.
I have been trading for more than ten years and have been thinking for more than ten years. At each stage of these years, I have different feelings. I found that my cognition has also changed with the increase of trading years, so I would like to share my journey of heart and mind.
The first stage, I traded for the ideal of life and financial freedom.
Before I started trading, I had been doing foreign trade business in Africa for a few years and made my first pot of gold. The concept of millions at that time was different from now. The wealth I had when I was young made me very ambitious, but I did not realize that I did not have any hard skills. After returning to the country, there was no more profitable business, so I started trading.
When I started trading, I was aiming for financial freedom. Note, my goal here is not to make money, but financial freedom. This means that I look down on small money and only want to make big money.
It was this idea that made me suffer a lot of losses.
The capacity of the trading market is very large. You can leverage a very large amount of funds on the software, with high leverage, you can make a lot with a small amount, and generate incredible windfalls. Moreover, there are always many successful cases in the market, indicating that this road is feasible, and I have also made money myself, so it is impossible to earn money elsewhere.At that time, I made a few quick profits, and I started to daydream about traveling the world with a laptop, just typing on the keyboard and clicking the mouse whenever I needed money.
Looking back now, my overconfidence at the time was really very naive. I've suffered and know that money is hard to earn, but I still got lost in the world of trading because the money came too easily, causing me to overlook the harshest realities of trading and forgetting my true destination.
I didn't understand the technology, nor did I understand the risks, and my blind optimism made losses inevitable.
The second phase was when I traded to prove myself.
The first phase was undoubtedly a big failure, but as someone with a very strong sense of self-esteem, it was hard for me to accept my own failure.
As the losses grew and the frequency of losses increased, I began to become agitated, then deflated, and finally numb. In addition to the financial losses being hard to accept, the sense of loss from the losses and the frustration from the failures almost led to a mental breakdown.
The failure in trading made my friends and family, who already doubted me, even more skeptical. Some genuinely advised me, while others were sarcastic. I couldn't afford to lose money, and even less could I afford to lose face. In order to recover my losses as soon as possible and to prove that I could, and to silence those people, I started trading more frequently.
At that time, I completely lost my rationality and was unable to think about my financial situation or how my trading skills were. I just wanted to make the right orders, make money, prove myself, and get out of the predicament.
This state lasted until I lost all my savings from many years, and I had no choice but to stop. I was freed from the agitated and restless emotions and began to return to rationality, but life had already returned to the starting point, with deep helplessness and regret behind me.
Later, I had about two years without trading, during which I started to learn, explore, review, and test trading systems. It was really about breaking myself and finding a new path.The third phase, trading for the sake of making money.
Having gone through so much, I truly returned to the essence of trading, the original destination.
At that time, the idea was quite simple: to earn some living expenses, just enough to get by. So I didn't take heavy positions, and my expectations for profits were not high. If I made a bit more, I'd treat myself to an extra drumstick; if I made less, I'd just eat a steamed bun. Either way, I could survive, but I no longer thought about making 100,000 with 10,000. Instead, I was content with making 10,000 with 100,000.
After lowering my desires to such a level, I found trading much easier. When placing orders, my heart wasn't racing, my hands weren't shaking, and I could stick to my trading system. When I suffered losses, I wouldn't be distressed to the point of losing sleep.
After so many years of execution, apart from increasing some capital, my purpose for trading has never changed. It's to earn the money I can earn, not to be greedy for more or faster, to support myself and improve my standard of living, and that's enough.
Sometimes I also joke with other traders, saying that I'm just like a factory assembly line worker, making and executing trading plans every day, following the routine and tightening screws. Although it gets a bit tedious after a while, I can still make some money.
So, what are we trading for? I think this question can only be answered by oneself.