Good morning, traders…
Ben here.
To achieve long-term success as a trader, you need to know what drives you to do it…
If your motivation to trade is a “want,” it might mean you’re curious about the markets, excited to learn a new skill, or interested in exploring financial freedom.
You enjoy the process of learning, practicing, and improving your trading abilities. You’re not in a hurry, willing to invest time in gaining knowledge and becoming a better trader.
This is a positive approach because there’s less pressure on every trade. You can make mistakes, learn from them, and slowly improve…
But if your motivation is a “need,” your mindset changes…
Maybe you feel the need to make money quickly to pay off bills, support your family, or get a head start on your retirement.
But this is a recipe for disaster. Trading is already stressful enough, but by making it a need, it can become an emotional nightmare.
Suddenly, you’re not just learning a new skill or investing in your future — you’re desperately relying on every trade to go your way to solve immediate financial problems.
This is a negative approach because the stakes feel much higher, and with that comes fear and anxiety…
Ask yourself: Why do you trade? Is your desire based on something you want to do, or is it something you need to do?
This difference is more significant than you might think, and understanding your motivation can directly impact your performance as an options trader…
Today, I’ll show you the crucial difference between wanting to trade and needing to trade…
Want vs. Need: What’s the Difference?
To help illustrate the difference, let’s use an example everyone can understand: mowing the lawn…
Most of us cut the grass because we want a nice yard, take pride in the appearance of our home, and don’t want our neighbors to complain.
But mowing the lawn isn’t a need — you don’t need a well-manicured yard to survive. It’s a want…
Now, let’s switch gears to trading. The best traders approach it with the mindset that it’s a want…
There’s no desperation involved — they’re patient, disciplined, and focused on long-term success. They can quickly bounce back from losses because they’re focused on the process, not their immediate results.
Unsurprisingly, these are the traders that succeed in the long term. However, if trading is driven by a need, the mindset changes for the worse…
The Problems of Trading with a Need Mindset
Trading with a need mindset is extremely dangerous…
When you’re under pressure to make money, you’re more likely to make emotional (and incorrect) decisions.
You’ll ignore the trading strategies you’ve learned, overlook your risk management rules, and take on too much risk in an effort to meet your financial goals.
The fear of losing and the desire for quick gains can lead to irrational decision-making. And as any experienced trader will tell you, emotions and trading don’t mix well.
For example, if you’ve studied how to manage your trades carefully, you know that placing stop losses near key support levels is critical.
But now you’re in a position where you need to make money…
And when every trade feels like it could make or break your finances, fear and panic start driving your decisions.
Suddenly, you might be tempted to remove your stop loss because you’re hoping that the market will turn in your favor.
Or you might take on a bigger position than usual because you’re hoping to hit a grand slam.
These actions go against everything I’ve taught you. But in the moment, they might feel necessary because you’re focused on meeting that financial need.
Trading out of need also amplifies the impact of losses. When you trade with a want mindset, a loss is disappointing, but it’s part of the process. You learn from it and move on.
But when you trade with a need mindset, a loss feels devastating. It can shake your confidence, increase your desperation, and lead to more impulsive decisions.
Instead of learning and improving, you might find yourself stuck in a cycle of emotional revenge trading, doing anything to recover from losses…
Now that we’ve explored the dangers of trading with a need mindset, let’s look at ways to avoid it…
How to Avoid the Need Mindset
- Set Realistic Goals
- Approach trading as a long-term skill-building process, not a get-rich-quick scheme.
- Set achievable financial goals on a realistic timeline, and don’t be discouraged if you don’t hit your goals perfectly.
- Trade with Capital You Can Afford to Lose
- Only risk money you’re willing to lose, so financial pressure doesn’t drive decisions.
- Avoid trading with money meant for essential living expenses.
- Understand that losses are an unavoidable part of trading. Make peace with the feeling of losing money.
- Develop (and Stick to) a Trading Plan
- Create a detailed trading plan (with defined entry, exit, price target, and stop loss) before putting any trades on.
- Follow your plan consistently, even when those pesky emotions urge you to deviate.
- Manage Risk Appropriately
- Use stop losses to protect your trades.
- Scale out of your winning positions gradually to lock up your gains.
- Position size carefully so that a single trade doesn’t have the potential to significantly impact your account.
- Choose strike prices and expiration dates that fit your risk management plans.
Today, take a moment to ask yourself: Is trading something you want to do, or something you need to do?
Be honest. If it’s a need in your mind, recognize the pressure that can bring and how it might affect your decision-making.
Then, work to change your mindset and make trading a “want.”
Trading is a lifelong journey, and understanding your motivation is the first step towards achieving your ultimate goals.
Before we go, let’s look at:
💰The Biggest Smart-Money Bets of the Day💰
- $6.5 million bullish bet on JD 12/20/2024 $20 calls @ $7.36 avg. (seen on 9/18)
- $4.7 million bearish bet on XLF 01/17/2025 $43 puts @ $0.90 avg. (seen on 9/18)
- $4.7 million bullish bet on XLB 10/18/2024 $93 calls @ $1.90 avg. (seen on 9/18)
Happy trading,
Ben Sturgill
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