FXLORDS Increase Your Profits
There will be very few who haven’t heard at least a fleeting reference to Maslow’s Hierarchy of Needs (Maslow’s Needs), the psychological theory proposed by Abraham Maslow in 1943.
Published in the periodical, Psychological Review, Maslow used the theory and its five levels to explain and direct human motivational behavior.
He divided the five levels into two groups; the deficiency needs or ‘d-needs’ as he called them at the bottom of the pyramid and the self-actualization needs in the final, smaller top layer.
He proposed that unless all the d-needs were satisfied, humans would find it difficult or impossible to ‘self-actualize’, or in simpler terms, reach their full potential.
For now it might seem difficult to see how this relates to Forex Trading but by considering the aspects of the top layer, you’ll see how Forex Trading and its theory helps supply many of the d-needs. Maslow Needs is one of the main theories, used in Managed Forex accounts.
The largest layer of the hierarchy, the bottom layer, deals with our physiological needs, breathing, eating, sleeping, drinking, reproduction, homeostasis and excretion. Many of these are instinctive and involuntary and without them, the subject would die.
The second layer relates to safety and security and in its most basic form can be thought of as shelter and personal safety but can also extend to financial security, employment and the safety of the family. This relates directly to one of the industry’s main warnings to Forex Traders.
Financial security and the provision of shelter reminds the trader not to risk all he has in trading. All FX professionals regularly stress the importance of trading only with money you will not miss and Maslow himself, through his hierarchy, directs the trader towards ensuring financial security before they consider seeking to reach into the esteem level, aspiring to attain that by trading Forex.
The middle level deals with the need to belong; friendship and family. Additionally, the successful trader will find they need the support of other professionals, experts and account executives to become comfortable as part of the trading community and trade confidently and to have the ambitions to pass through the journey a forex trader experiences when trading a live Forex account. It’s at this point that damaging emotions can take over such as: fear of loss or failure, greed for excessive profits or over-inflated egos . These by themselves, or in combination with each other, have the power to destroy what could have been a promising trading career.
At the fourth level we begin to encounter the positive needs and emotions that trading can engender; a rise in self-esteem through a successful pattern of trades and with the rise in confidence as your skills develop you’ll find yourself no longer glued to screens, studying charts and indicators and drawing lines. You’ll sense real achievement where you are now using your profits for something tangible – a better life for yourself and family or even being able to make the lives of others better through charitable donations.
You’ll be earning the respect of other traders; perhaps in a forex related forum or in your job as a trader where you can share your strategies and help others and also learn to respect other traders who are as successful as you are.
Once you’ve achieved these upper levels consistently and as Maslow recommends, mastered them, you are ready to move on to the self-actualization level, where you can aspire to be the best trader. Here you will be planning to ensure consistent profits, your trading skills will be fully developed, you’ll trade spontaneously based on your ‘sixth sense’ and you’ll be successful at it.
Maslow’s Hierarchy reminds us that successful Forex Trading is a journey to be taken step by step, consolidating successes and learning from failure, never risking more than we can afford to risk and ensuring that we keep a balance between work and family. Ignore Maslow and a trader can undermine the d-needs by failing to secure a strong physical, social and psychological base to work from.
Maslow tells us that when we no longer need to think of those things because they are instinctive, we can then enjoy the more rewarding aspects of successful trading; the high regard of others, a feeling of personal well-being and a level of self-confidence that means we’re not stuck in front of the screen, scared of the market’s next move and from there, we can achieve personal and monetary wealth. Master that he says, take advantage of the freedom that mastery has given us, and we can enter the stage where we can strive to be the best we can, safe in the knowledge that what we needed to be constantly aware of in the early stages of our journey is now safely taken care of.
