What money means to you psychologically

[ThaddeusFinch]

I totally get where you're coming from. Money as a way to feel safe and free, letting you live life on your terms without stress, really resonates. It's not about showing off, but about having the comfort and chances to do what makes you happy.

 

[Larisa]

While seeing money as a tool for security and freedom makes sense, it's got its downsides too. Focusing too much on financial security might make us too scared to take chances that could lead to growth, or we might miss out on life's non-material joys, like relationships and personal passions. Plus, if we tie our happiness too tightly to how much money we have, we could end up feeling stressed or isolated, especially when financial situations change. It's all about finding that balance, where money is important but not the be-all and end-all of our happiness and sense of freedom

Absolutely, balance is key! Money's important, but it's not everything.

 

[brettb]

I hated not having money in school. Getting my first proper job at the age of 16 was such a great feeling.

I think that was really formative to my obsession with accumulating a lot of money.

My net worth CAGR since 2000 is 18.9%. That's when I started my finances spreadsheet.

 

[da-net]

Before I retired, money was both a way of keeping score but also allowed me to have peace of mind that I did not struggle to provide for my family. Today, my retirement provides everything I need, but I still do things to make money.

The money I make allows me to help support Filipino families that have great needs. I've been doing this for over 6 years now. I provide support direct to those families normally in Balik Bayan boxes I ship. Sometimes the BB boxes contain food, clothes, older laptops, household items. One family I help, I see photos and videos of the grandchildren, the food and clothes, towels, blankets, electronics and know that they can eat 3 times a day, have shelter and the solo grandmother taking care of them is not stressed too much trying to provide with her meager retirement ($75 USD monthly). The children's mother was a single Mom that passed away in 2015, so the GrandMother had to take care of the 2 little girls.

If someone else wants to do something like this for another family, let me know and I'll put you in touch with a family in the Butuan area, which is an extremely poor area of the Philippines.
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[Simon54]

For me, money isn’t just about paying bills or buying things. It’s about security and freedom. Psychologically, it gives me a sense of control and stability, but it can also bring stress if I feel like I don’t have enough. It’s weird how it impacts the mindset so much, but I guess that’s just the world we live in!

 

[ChelseaR]

For me, money means options and opportunities. Money gives me the ability to invest in personal growth, learn, and support whatever matters the most to me. I am not just talking about security, but having the opportunity to take risks and make experiences without having any financial limitations.

 

[Simon54]

To me, money is a tool for security and freedom. It's about having the peace of mind to enjoy life without constant worry, and the ability to make choices that align with my happiness and values. It's less about the flashy stuff and more about comfort and opportunities.

I completely agree. Peace of mind always comes first and money is just secondary.

 

[FX4Newbies]

Hi Trdr... first time stopping by.

I like your thread and the idea behind it. Glad you're getting quality feedback!

There are many things that money can buy. For that reason, it is essential. However, there always should be a balance because the most valuable things in life cannot be bought with money...like life itself. Steve Jobs' last words come to mind.

As a trader, any attachment to money and what it means to the trader MUST be set aside. If not, the emotions will surface quickly, and Mr. Market understands that VERY well. For me, money is a tool that provides the means to get things done, help others etc. As important as money is, time in my estimation, is even MORE important... 'cause when time is up, money cannot save you.

Keep up the good work!!!

 

[Simon54]

Hi Trdr... first time stopping by.

I like your thread and the idea behind it. Glad you're getting quality feedback!

There are many things that money can buy. For that reason, it is essential. However, there always should be a balance because the most valuable things in life cannot be bought with money...like life itself. Steve Jobs' last words come to mind.

As a trader, any attachment to money and what it means to the trader MUST be set aside. If not, the emotions will surface quickly, and Mr. Market understands that VERY well. For me, money is a tool that provides the means to get things done, help others etc. As important as money is, time in my estimation, is even MORE important... 'cause when time is up, money cannot save you.

Keep up the good work!!!

I agree that money’s just a tool, but time is everything. How do you keep emotions in check while trading?

 

[FX4Newbies]

I agree that money’s just a tool, but time is everything. How do you keep emotions in check while trading?

Yes...time is a big deal.

Once I follow my trading method, I usually "set and forget"... meaning stop loss and take profit are in place. I have a tool that would alert me as price reaches certain profit or loss levels. At that point I can revisit the chart to get an update. But once the method checks out, that's it... in the trading oven it goes, and I close the door...and yes, the market does need time to perform: very important!

My work is done after I have done my analysis and placed the trade. To not set your emotions on fire so-to-speak, stay away from the heat. Don't sit there and stare at the P/L. Let the trade go...


FX4Newbies

 

[Simon54]

Yes...time is a big deal.

Once I follow my trading method, I usually "set and forget"... meaning stop loss and take profit are in place. I have a tool that would alert me as price reaches certain profit or loss levels. At that point I can revisit the chart to get an update. But once the method checks out, that's it... in the trading oven it goes, and I close the door...and yes, the market does need time to perform: very important!

My work is done after I have done my analysis and placed the trade. To not set your emotions on fire so-to-speak, stay away from the heat. Don't sit there and stare at the P/L. Let the trade go...


FX4Newbies

Completely agree. Setting up alerts & stepping away is the best way to avoid stress and wrong decisions. Let the trade do it's thing.

 

[FX4Newbies]

Any emotional or mental attachment to that trading capital, the price action seems to be engineered to bring it to the surface. Your reason for entering the trade is of no consequence to Mr. Market. He is after you...your mental and emotional states once you're in...and that my friends, is the bottom line to your success or failure. Do make sure your trading method is solid though...it does help the process and the journey along the way.

 

[Simon54]

Any emotional or mental attachment to that trading capital, the price action seems to be engineered to bring it to the surface. Your reason for entering the trade is of no consequence to Mr. Market. He is after you...your mental and emotional states once you're in...and that my friends, is the bottom line to your success or failure. Do make sure your trading method is solid though...it does help the process and the journey along the way.

I got that! How do you manage emotions when things get hard in a trade?

 

[FX4Newbies]

By "when things get hard in a trade", I think you mean when you are hanging on to what you would consider a big loser. That could mean a few things:

1. Your trade direction was wrong to start. Retracements tend to give you "hope" to hold on, but then the trade continues against your position. That could mean your method needs tweaking because you are trading against the main trend or you just misread the market.

2. Your trade direction was correct, but your timing was wrong...meaning you got in when the market was retracing, so you're losing because of it. Could mean that your entry criteria may need refining, or you need to pay more attention to the trend on the longer time-frames.

To answer your question...

To manage emotions, you need to be able to exit that "emotional state" by latching on to something more concrete...a more logical state. Emotions and logic can't operate at the same time, so you've gotta flip the switch. You can do so by going through the details of your method...begin thinking things through. Bring your focus there. If you can accurately assess what is going on (per your method), then you can make a better decision as to whether to hold on or bail...and bailing should be done as early as possible once you realize your trade is in the wrong direction.

If you feel that you cannot assess what is going on in the market correctly, maybe you should just exit, clear your head and take another look.

Overall, don't trade with large position sizes that would create such a loss, that things could get you to that point of a "hard trade" from the standpoint of enduring such losses. Reserve those "larger" positions for entry criteria that are what I call textbook set-ups per your method: where everything lines up. By the way, do you use stop loss orders?

Hope that helps.


FX4Newbies

 

[Simon54]

By "when things get hard in a trade", I think you mean when you are hanging on to what you would consider a big loser. That could mean a few things:

1. Your trade direction was wrong to start. Retracements tend to give you "hope" to hold on, but then the trade continues against your position. That could mean your method needs tweaking because you are trading against the main trend or you just misread the market.

2. Your trade direction was correct, but your timing was wrong...meaning you got in when the market was retracing, so you're losing because of it. Could mean that your entry criteria may need refining, or you need to pay more attention to the trend on the longer time-frames.

To answer your question...

To manage emotions, you need to be able to exit that "emotional state" by latching on to something more concrete...a more logical state. Emotions and logic can't operate at the same time, so you've gotta flip the switch. You can do so by going through the details of your method...begin thinking things through. Bring your focus there. If you can accurately assess what is going on (per your method), then you can make a better decision as to whether to hold on or bail...and bailing should be done as early as possible once you realize your trade is in the wrong direction.

If you feel that you cannot assess what is going on in the market correctly, maybe you should just exit, clear your head and take another look.

Overall, don't trade with large position sizes that would create such a loss, that things could get you to that point of a "hard trade" from the standpoint of enduring such losses. Reserve those "larger" positions for entry criteria that are what I call textbook set-ups per your method: where everything lines up. By the way, do you use stop loss orders?

Hope that helps.


FX4Newbies

Makes sense, so being logical is the catch here! Do you usually stick to strict stop losses or as you go?

 

[FX4Newbies]

Makes sense, so being logical is the catch here! Do you usually stick to strict stop losses or as you go?

Yes. You must remain objective so you can assess what is happening in the market according to your trading methodology.

I usually don't move a stop as the price progresses. Why? Stops need to be strategically placed so that they are not hit by the "song and dance" of price action as it is moving toward the profit target. Many traders think it is okay to just calculate the risk (x% of their balance or equity) and place their stop accordingly from their entry price. Many times, though, they are entering the trade late, and their stop lands them in the line of fire for it to be hit. So, for me, strict stop losses most of the time (on rare occasions, none), and I use price alerts along the way to monitor as needed.

 

[FX4Newbies]

To me, money is a tool for security and freedom. It's about having the peace of mind to enjoy life without constant worry, and the ability to make choices that align with my happiness and values. It's less about the flashy stuff and more about comfort and opportunities.

Hi Larisa,

Certainly agree with those key reasons for having it...and lots of it.... for you and others as well as it aligns with your values.

 

[Simon54]

Yes. You must remain objective so you can assess what is happening in the market according to your trading methodology.

I usually don't move a stop as the price progresses. Why? Stops need to be strategically placed so that they are not hit by the "song and dance" of price action as it is moving toward the profit target. Many traders think it is okay to just calculate the risk (x% of their balance or equity) and place their stop accordingly from their entry price. Many times, though, they are entering the trade late, and their stop lands them in the line of fire for it to be hit. So, for me, strict stop losses most of the time (on rare occasions, none), and I use price alerts along the way to monitor as needed.

Got it - So, do you adjust your strategy based on the price alerts based different market conditions?

 

[FX4Newbies]

Got it - So, do you adjust your strategy based on the price alerts based different market conditions?

The purpose of the price alerts is to make me aware that price has crossed certain thresholds that are important to me, based on my TP or SL levels. So, for example, if I have a 50-pip TP set, then I may want to know if price has crossed 30pips in profit, at which point I can re-examine the chart and perhaps revise my TP or, I might decide to reduce the position at that time. I basically use them as progress reports on the trade. In the case of a stop loss alert, it would be a time to double check my analysis.

As a side note, you can also use a price alert for example if you are anticipating a price move at a certain level and you want to be alerted as to when price is in the area. The tool on MT4 will also allow you to set time alerts, not just price.

 

[Simon54]

The purpose of the price alerts is to make me aware that price has crossed certain thresholds that are important to me, based on my TP or SL levels. So, for example, if I have a 50-pip TP set, then I may want to know if price has crossed 30pips in profit, at which point I can re-examine the chart and perhaps revise my TP or, I might decide to reduce the position at that time. I basically use them as progress reports on the trade. In the case of a stop loss alert, it would be a time to double check my analysis.

As a side note, you can also use a price alert for example if you are anticipating a price move at a certain level and you want to be alerted as to when price is in the area. The tool on MT4 will also allow you to set time alerts, not just price.

I agree, even I use price alerts in a same way. Just little curious on how often do you end up adjusting your TP/SL after an alert?