Have I ever wondered what drives a person to do everything? Why do the richest people in the world get up early and work every day? Is it because of greed? Irresistible ambition? Megalomania? The answers to these questions are closely related to the trading realm and can explain how great achievers and great traders can rise to greatness.
"If the motivation for trading is money, the direction is wrong. A truly successful trader must be immersed in trading, and money is just an incidental issue. Although this is not the first thing I said, I believe this theory. The main motivation is not the glory of success. The wealth brought by success is usually just a by-product. In short, 'the game itself is the key.'"
In addition to motivation, more importantly, passion and focus. I think most people underestimate the importance of passion and focus for success, especially for extraordinary success.
Yes, trading is fun. Yes, you have heard traders say: 'I just love trading, I do it without money.' If you have been in this field for a long time, you will find that some people, including yourself, spend countless time reading and analyzing various information, without any obvious purpose, just because it is interesting. Some people stay up late and try to solve a math problem, and the situation is the same.
"To reach the top level of trading, you must have a kind of crazy passion. You can't think 'If I do this, I can buy a BMW, or if I do this, I can make a name for myself.' The motivation for trading must come from the heart, a kind of persistence in solving problems. In the long years of the entire trading career, it is difficult to maintain this kind of passion."
Unless you experience it personally, it is hard to understand this kind of crazy passion. This is a high degree of focus, everything else seems to be nonexistent, and there is nothing else in the field of vision. This kind of passion comes from the deepest layer of the psychological structure, and what is shown on the outside is extremely diligent work.
"If you meet a very, very successful trader, he sincerely believes that his success is because he is smarter, faster, more understanding, and more positive, then you can question him. All successful traders have a common trait. Regardless of whether they have received higher education. Strong understanding and hard work."
"Looking back at the student days, good students usually have two types. First, they work very hard, have strong organizational skills, are efficient, do homework and exercises step by step, and repeatedly review the content of each chapter of the text."
"Another type of person is less, they are very smart, do not need to work hard, and have extraordinary understanding. You rarely see people who are smart and have abnormal understanding, and they also work very hard at the same time. Top traders, usually have both conditions. They are very smart, have high understanding, work hard, and have strong organizational skills. It may look messy, but it is not."
Bill Lipschutz has a crazy passion, and he is very lucky that his mentors and learning idols also have the same qualities.
"I know a British gentleman named Mike Simpson, who was working in the trading room of a market-making bank at the time. We had a lot of trading dealings, and then he also joined Solomon. When I met him, Mike had 10 to 15 years of market experience. I followed him to learn the real key to the operation of the foreign exchange market."
"Option theory is not very good, but his market experience is very rich, he understands the operation of the foreign exchange market, the operation of market-making activities, the operation of market flow, and the crux of market fluctuations, and can grasp and focus on certain things, ignoring everything else."
"In three years, we became good friends by phone. Our backgrounds are quite similar, both are the only sons in the family, very enthusiastic about trading, and work hard. Every morning at five o'clock, he would arrive at the Tokyo office and work until nine or ten o'clock in the evening, and then go home to sleep for four hours. Since I met him for ten years, he has always been like this. Of course, before we met, he had been working for many years."
Intelligence and higher education, as well as the desire to make money, these conditions may bring success. But for extraordinary success, talent and hard work are indispensable keys. If you want to know the secret of success, this is it.
"You have to be very smart, and willing to work hard, you can find that many very smart people can't maintain long-term hard work, because they are not willing to invest time. The driving force should not come from the desire to make money, money is just a by-product. You have to have passion and be immersed in the whole game."
If everyone thinks you are crazy, this is the right track.
Crazy passion is a rare quality, that few people understand, and fewer people have. For this reason, when someone shows this ability, they may become a joke to everyone. Bystanders see successful people, and they also see hard-working people, but they don't think there is a connection between the two, and they are afraid that there is a connection between the two. Bystanders will comfort themselves with Freudian defense mechanisms: "Anyway, I don't want to succeed, it's not worth it, and success doesn't necessarily require hard work."
"In this field, I think many people don't understand the importance of passion and focus. For a hard-working trader, some people may think: 'God! He gets up at 5:30 every morning, continues to work on weekends, and simply has no life. I want to leave here and go on vacation, play in Switzerland for three weeks.' Of course, I'm not saying that traders shouldn't take vacations, but this is a mentality problem. Top traders don't often leave the market, they don't want to do that."
Bill Lipschutz's words reminded me of a story. A lady said to the great violinist Fritz Kreisler: "I would give my life in exchange for your violin-playing skills!" "Respectful lady," Kreisler replied, "That's exactly what I want." Next, Bill prepared to explain the reasons for this passion and perseverance.
"Every trader you visit in the book has a high degree of motivation. These motivations sometimes come from the deepest reasons in the heart: maybe they originally came from a poor family, some people may be based on inner struggles, maybe because their father was very successful and put psychological pressure on him."
"But no matter what the motivation is, you can hardly grasp it. In short, everything is about passion and focus, which is strange in the eyes of others. People think: 'What's wrong with that guy? He is always working, either doing this or doing that.'"
"I think there is one thing that is very helpful for my trading career. I always think about the market situation, and how they work, and try to judge the trend of the exchange rate. I don't think: 'God, I give up spending time with friends, I give up weekends and stay here, I give up sleep.' I don't have this kind of mentality, I just want to trade."
"Extraordinary success must pay a price, and many people are not prepared to pay this price. For those who lack ability, they have no chips to pay the price. For those who are crazy about it, they hardly need to pay the price. They originally love work."
Shifting attention: there is life beyond trading
Of course, even the most focused and passionate people need to maintain a sound personal life. Therefore, the attitude of passion must also be transferred to other things, such as family. In this regard, trading also requires life management skills.
"Sometimes, some things become more important in the whole life, inevitably forcing you to shift your attention. After getting married, you have a family and children, all of which are important, and you want to be with them. Therefore, you cannot just focus on how to beat the market, there are other considerations for a healthy life: 'Now it is Saturday afternoon, I think I should tidy up the garden, or play ball with little Bill.' This is what you should do, instead of continuing to calculate things that you may not have a chance to consider on Monday morning after the market closes."
"When you hire some people who have just graduated from school, they may be full of enthusiasm, but may not be able to focus. In this period of life, there are some important issues, for example, unmarried bachelors may be busy dating, and married people may have just had children, these are all major events in life. It will inevitably consume a lot of thoughts. Of course, I am not saying that you should not hire young people who are single or just married, I am saying that you should look for those who are mature, can focus on work, and can handle other things in life at the same time."
"In trading, you must be able to grasp the priority of information immediately. What is the most important thing? What will affect the fundamental trend of the market? Facing everything in life, you must have a high degree of organizational ability, and be able to evaluate the priority of things, to maintain focus. Only by organizing time properly, a trader can find time to shift attention. Arrange a time to recharge. To maintain this combination of high understanding and work spirit, I don't think it has anything to do with intelligence, this is a kind of wisdom. A rare quality, a condition that all successful traders have."
The crazy focus that Bill Lipschutz discussed is derived from childish passion. This is a curious psychology, trying to explore and explore the mysterious "toys" in the market.
Wall Street and other financial centers represent the place of money games, attracting many ambitious young people, they want to have luxurious residences, beautiful cars, and expensive clothing, these are no problem. I can't say that this is an improper motivation or a non-existent motivation, but this kind of motivation cannot create real success. I think the most important thing is childish passion, trying to explore everything about trading, including your competitors, the elusive market, the weird market, and the constant changes, like amoeba, almost no entity.
"Top traders usually have childish passion and want to know everything about the game. Whether it is the psychological aspect of this game, the technical aspect of this game, the nameless and shapeless things in the market, how individuals compete against the whole market, or how individuals compete against everyone else. Long-term traders also have a high degree of passion for the most bizarre things. For example, if you talk to a top fixed-income trader, he can tell you some delivery details that you have never thought of."
This kind of passion for the market often brings some unexpected benefits.
"When I was engaged in foreign exchange options in Philadelphia, I was very familiar with the settlement, notification, and delivery procedures. For example, there was no automatic execution regulation at that time. When the option expires, if you intend to exercise the option, you must notify the option clearing company before 5:00 p.m. on Friday."
"Therefore, the trading of Philadelphia foreign exchange options expires at noon on Saturday, so until 10 a.m. on Saturday, traders still have a window of opportunity. If some news that could affect the exchange rate occurred on Friday night or Saturday morning, this would represent an advantage. The same is true, if the option you sell is assigned, you will generally get notified by the clearing member on Monday morning."
"However, after the clearing company completes the random assignment procedure, the data is sorted out at 1 p.m. on Sunday. Therefore, there is always an afternoon on Sunday every month (because options are only delivered once a month), I will run to the clearing company and get the assignment notification data 20 hours earlier than others, and Tokyo has not opened yet. I believe that other people are not willing to spend time or have no interest in getting the data early."
"You can find a kind of childish passion and complete perseverance, trying to understand every detail. They will do their best, and the purpose of these actions is because of the actions themselves, they do not do this for 'this can make me a more successful trader'. They want to know more because they can't control their passion."