Does Failure Motivate You? by Van K. Tharp, Ph.D.

This topic might press your buttons. But finding your hot spots helps you discover how you sabotage yourself.

I read a wonderful little book by Jerry Stalking entitled, Laughing With God.1

In that book, the following dilemma is brought up, and here I’m going to paraphrase the conversation pertinent to trading/investing.

God: Do you want to win without losing?

Trader: Of course.

God: If you win, you must lose as well. But you lied to me. You said that you’d like to just win. If that were the case, you’d win much more often. The possibility of failure motivates you much more than the possibility of success. Your whole culture, with few exceptions, is dependent upon failure or at least the fear of failure.

If there were not the possibility of failure, you could not take any credit for success. You wouldn’t feel so good about winning. How many times would you watch a football game if you knew the outcome? It is the uncertainty of the outcome that keeps your attention.

What if you always knew what was going to happen before it does. As a matter of fact, you already have that ability, but you do not use it because everything you presently call fun in your life would be lost. You would lose the uncertainty that you thrive on, feed on, and yet attempt to diminish.

The last statement may “get to” most of you. But what if it’s true? Ed Seykota said in Market Wizards that people get what they want out of the market—excitement, punishment, and a justification for their emotions. I’ve certainly seen plenty of evidence to suggest that his observation is true. But the conversation gets even more interesting:

God: I am saying that you already can know the future. Remember that future and past are both illusions. The fact that you ignore this ability makes it more obvious that you do not want to know the future or that you love wanting to know the future while believing that you cannot know it.

There is no time—just present. You use the uncertainty (mock uncertainty) of the past and the uncertainty (mock uncertainty) of the future to keep yourself suspended in the illusion of time while calling the whole process life.

Just to make this conversation more meaningful, imagine that you are 100% accurate on every trade. You know every top and every bottom on every stock. You are never wrong about a trade. Would you honestly keep trading?

Perhaps your response is, “Sure I would! I’d get all the money in the world.” Well, would that be interesting? I tend to doubt it. Trading is only interesting because of the possibility of losing. You are now in a position where you can buy anything, do anything, etc., because you will never lose money on a trade. Would you still trade? Why or why not?

Everything in this tip may be made up. Nothing may be true, but I’d like you to assume (act as if) it is true. Just pretend that it’s true. When you do so, what happens to you inside? How do you feel about trading? Would you keep on trading? If so, how often? If not, why not? What does that tell you about yourself? Is it the uncertainty that keeps you in the game? Would you keep trading if you had all the money in the world? Why? What do your answers tell you about yourself?

I would encourage you to do this exercise and notice what comes up for you. How many trades would you take if you had no uncertainty in the outcome? What do your answers tell you about yourself?

This is all part of exploring what money really means to you.

1 I don’t know whether such books come from God or not, but if they give me new ideas then I find them very exciting. If it stretches your beliefs to think it came from God, just assume that someone made it up. But at the same time imagine that it might be true. This one gave me a lot of new ideas, and if you open yourself enough to do the same you might find the ideas quite expansive.

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