Greed. Envy. Gluttony. Sloth. Wrath. Lust. Pride… the seven deadly sins. According to ethics, these are the transgressions standing in the way of spiritual progress and purity. In reality though the seven deadly sins represent the dangers of both excess and defect which in modern times can be applied to virtually every aspect of life.
These cardinal vices often play out in the financial markets, leading traders to spiritual ruin or even bankruptcy. For this reason, it’s important to understand how these sins impact our trading behavior. It’s even more critical to identify the root causes of these transgressions so that we can replace them with virtues.
In this series, we take a look at the seven deadly sins of financial trading and how you can overcome them to improve your trading mindset.
Lust is traditionally understood in an intimate context, however if that’s what you are expecting here you will be disappointed… it isn’t the Wolf of Wall Street! Actually lust can refer to any uncontrolled urge, including those related to money and finances and many people become traders because they have an insatiable appetite for money and can’t find conventional ways of attaining it.
Remember that quote “The love of money is the root of all evil”? Well, wanting to be financially stable and have a good income is ok but the all consuming lust for the mighty dollar can be problematic. When money is on the line, lust can be a very dangerous trait. This deadly sin can lead you down the path of greed, gluttony and even wrath in the event that your trades don’t go in the right direction. Practically speaking, trading forex, stock indices, commodities or CFDs out of pure lust without grounding and education is a sure fire way to blow out your account. It’s also extremely irresponsible.
Traders motivated by an intense desire for wealth may need to seek to purify themselves before letting their lust destroy them. Purity doesn’t have to be a religious concept; in fact, it can refer to any intention to enjoying good. A trader’s road to purifying himself doesn’t require pilgrimage it requires critical self-reflection (boring, but hear us out). Critical self-reflection means zeroing in on the reasons why you decided to become a trader. .. perhaps this is financial security?
OK, but what else motivates you other than financial success? How much money do you need to be happy or feel successful? What will all that money help you achieve? If you acquire it, how will that money change your lifestyle or behaviour? Most importantly, how do you intend to give back once you’ve acquired your fortune?
These are just some of the questions you need to ask yourself to ensure that your goals align with your trading strategy. As you can see, self-reflection doesn’t have to be boring. Rather, it should help you understand your motivation for becoming a trader. Now would be a good time to re-list your goals and read up on success stories in the market. The Warren Buffetts and Paul Tudor Jones’ of this world can help you develop an appreciation for the type of personality that’s most conducive to building and sustaining riches. They will also teach you how to be humble.
In reality, managing lust is all about self control and if you are having trouble in this capacity, there’s a pretty good chance you lack control in other aspects of life as well. Psychologists say that lust is almost instinctive, and once we begin to fulfill our lustful desires, it’s difficult to shake it off so the vicious cycle begins. As students of behavioural finance and trading psychology, traders must learn to feel satisfied with their accomplishments and reward themselves appropriately. This will ensure a healthy progression toward one’s goals rather than fall into the vicious cycle of lusting after something bigger just for the sake of it.
- Take note of why you really want to make money
- Work on self control in all areas of your life
- Relist your goals and work towards them
Are you a lustful trader? Tweet us @easymarkets and let us know, alternatively contact our support team for assistance.
Source Sam Bourgi- Financial Markets Writer