I HEARD A TRADER literally say, “Oh my god, I want to trade full-time so badly. I’m putting in 100%, and I’m going to throw everything I’ve got at it. This is my passion. I love everything about trading!”
Then, I watched in dismay as they fizzled out after a series of 12-hour days watching the markets and reading trading books.
I head another trader say, “I’m going to learn to trade methodically so that in 3 years, I’ll be able to donate 30% of the money I earn to helping battered women escape from their dangerous home-lives.”
I can tell you that a clearly defined ‘why’… a purpose, a reason to trade will trump the passionate, manic, excited trader every time.
And now there are stats to back this up. University of California Berkeley Professor, Morten Hansen, surveyed 5,000 employees to look at the connection between performance, purpose, and passion.
He found that people without purpose or passion are very low performers – bottom 10th percentile.
Similarly, he found that those with high passion and purpose were outstanding performers – 80th percentile. Pretty much as you’d expect, hey?
What IS the surprise is that purpose is far more important than passion. If someone had low passion but high purpose, they saw a major jump in performance – 64th percentile.
|HIGH PURPOSE||LOW PURPOSE|
|HIGH PASSION||80th percentile||20th percentile|
|LOW PASSION||64th percentile||10th percentile|
Perhaps part of the reason is that purpose connects us to others.
In Dan and Chip Heath’s latest book (that CT bought me for Christmas) called ‘The Power of Moments’, they reached this same conclusion.
“Passion is individualistic. It can energize us but also isolate us, because my passion isn’t yours. By contrast, purpose is something we can share. It can knit groups together.”
So develop your ‘why’. Even if you don’t LOVE every aspect of trading, if you have a firm purpose, you’ll come out a winner in the end.