Finding Balance While Trading
Gideon Rachman, of the Financial Times, wrote an editorial on Tuesday titled The West Re-Examines the Rat Race. In it he cites a book in progress by Lord Skidelsky, How Much is Enough: The Economics of the Good Life. Skidelsky states that an unhealthy preoccupation with wealth accumulation has dominated Western culture in the last 3 decades. He says that, “in almost all religions and moral philosophies, wealth is a means to an end – to live decently and agreeably. After a while the quest for more and more wealth becomes irrational, but our societies are all organized around the pursuit of wealth beyond limit.”
I actually tend to agree. While Rachman approaches this issue on a larger, cultural scale, I think it is important talk about what that might mean to us as individual, retail traders.
I haven’t met a student yet who has anything other than noble ambitions for their trading profits. It’s not about getting rich for most people, though most have fantasized about the possibilities. It is usually about the freedom that will come with profitable trading. – Freedom to leave a job that pays too little and expects too much. – Freedom to provide the extras that your family would enjoy to have a more fulfilling life (vacations, better schools, better medical options). – Freedom to spend more time with your loved ones. – Freedom to finally pursue your own personal dreams.
Yet there are one of two extremes that faces the new trader: not focusing enough and focusing too much. Any time we deal with extremes we lose our balance.
Balance, I believe, is a key component to becoming successful at any new endeavor.
- The person who doesn’t keep enough focus on trading is going to constantly feel pulled by his ‘real’ life and the dark cloud of trading ‘shoulds’ that he’s avoiding.
- The person who focuses too much on trading is going to quickly lose sight of the reasons she wanted to trade in the first place.
If Lord Skidelsky might be able to recreate a capitalistic/democratic experiment he may start with the founding idea of a “pursuit of happiness”-not wealth- as a key tenet, not only to the constitution, but to the practice of a government’s culture.
While that is highly unrealistic, we, as individuals, can give ourselves a new starting point and find that balance in the process of our trading habits, routines and practices. That way, when we have good trading going for us we don’t feel like we’re giving up what works in business to make up for what isn’t working in Life.
We are lucky to have moments that are truly balanced, much less actual stages in our lives. However, making a habit of rebalancing and staying conscious when we’re unbalanced now – while you’re developing your trading style - will go a long way toward experiencing more balance in the future. I also believe that it will help you stay focused on the real reasons you wanted to trade and prevent some of that tunnel vision toward wealth that can be so detrimental to your progress. Because it is a lot easier to build good habits from the ground up than it is to make major changes once you’ve established the bad habits.
What do you think – either broadly as the original article speaks, or personally toward an individual’s quest for wealth? What do you do when you feel your life is slipping out of balance?
Triffany Hammond helps traders of all levels, gain the tools, resources and guidance necessary to build on their strengths and work around their weaknesses so that they can make the best possible decisions for themselves in the Forex Market. Triffany is a regular speaker and contributor at 
I know Triffany is expecting me to comment, being one of her most imbalanced students, so who am I to disappoint!
Firstly the original guy, the Rachman doud, is innacurate, in the last 3 decades people have changed the way they do business, we no longer live in a little house on the prairy (ps i hated that show) where if you opened up a barber shop and apart from the odd bierd trimming that was interrupted by a gun fight you pretty much had the business of the town to yourself, we are now globalised, people are willing to travel by car to shop or go online and buy, we are now in total competition with everyone and its dog eat dog out there, if you dont build on wealth then you aren’t gonna eat, simple!
In trading as in any business, balance is attainable, my only question would be, is it attainable now ? can a young trader or a young businessman sit at a relaxed pace and expect things to work ? there is a steep learning curve in the business world and in trading, and it isn’t until you go up that steep climb that you eventually find that balance. How many of you have had a period of extreme exercise craziness until you eventually find a balanced routine that doesn’t have the Rocky theme music in it … I am not talking about extreme imbalance, but i do believe there needs to be that bit extra effort in a learning curve to find what works.
Mr Imbalance !!!!
Certainly I’m not saying that balance means you’re not working hard. Quite the opposite actually, because not working hard enough is an imbalance all on its own. And working toward balance takes a lot of its own kind of work.
What I’m suggesting is that when we keep our need for balance in the forefront of our minds we are more likely to do the things that are good for us along the way. Those good things refuel us and make us more productive. When we’re rejuvenated we can better focus on our work. We will not only attain our goals faster, but also have created a lifestyle of having that goal AND balance. Not just the goal and then try to attain balance.
Again, we’re rarely fully balanced anyway, so it is really keeping a constant awareness and presence in our lives that allows us to stay conscious in our decision making. Rather than blindly pursuing wealth and never realizing everything we lost along the way.
Well. I simply treat my trading as a part-time job . I keep a log book of time I spend trading or studying trades or price action. Try to stick to your trading plan and tweak it and your emotions. As far as balance I could see a total newbie losing balance and over trading ( number 1 sin of newbies ) and then getting emotional and fighting the market ( again ,very bad ) . I traded poorly last week ,as compared to the week before, part was price action, part was me who got to impulsive . Ah still in second grade. Good luck to all
‘Balance’ I guess is an interesting concept. Just finished reading the excellent Warren Buffett biography by Roger Lowenstein. Buffett was at his best when shut away for hours on end with nothing but company reports – even after a days work. The family would be at leisure in other parts of the house, Buffett himself making the occassional appearance. He had to be persuaded to buy a holiday home – and guess what he did there?
Perhaps consequentially, Susie his first wife eventually moved out (though they remained married), and for leisure he enjoyed Bridge and occassionally met up with a select group (admittedly to discuss investing). So the question is: Was/Is Buffett unbalanced? On the one hand his record speaks for itself. On the other his every waking hour is consumed with investing – the time he seems at his best.
As for ‘How Much is Enough?’ I think Skidelsky would definitely put Buffett’s $47.0 bil in this category – till you learn Buffett pays himself about $100K annually, drives a Caddy DTS from GM (I think), lives in the modest house he bought 30 years ago and has committed the lionshae of his wealth to Gates’ charity.
So is he excessive/unbalanced or modest/balanced?
After you reach a certain level of natural expertise where your abilities in investment are already part of your subconscious then it’s not a stress to think about it, its actually relaxing, so what Buffet does in his spare time reading reports for him is like us watching a movie
… I have never read about Buffet but from the little I know his life was imbalanced in so many other areas, his life focus so messed up, to the point where his own family came a distant second to a company report, that I’d rather learn from someone less successful but more normal.
True, but if I’m happy and at peace doing something, others are not harmed by it and ultimately many are benefitted from it … then that’s a place I’d like to be. I’m not sure I totally agree that his life focus was so messed up – he remained fondly attached to his wife and is still close with his kids. If someone is successful in an area, then that in my opinion is the person to learn from. How I apply what they do to my own state of balance is then totally up to me …