There will be very few who haven’t heard at least a couple of references to Maslow’s Hierarchy of Needs (Maslow’s Needs), the psychological theory proposed and published by Abraham Maslow in 1943 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 basic needs which are at the bottom of the pyramid. Self-esteem and self-actualization needs in the final, smaller top layers.
He proposed that unless all the basic needs were satisfied, humans will 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 helps supply many of the higher group of needs. Maslow’s needs is one of the main theories used in Managed Forex Accounts, Forex Trading Signals, and it is among subjects discussed in the Training Course.; it helps understand the general sentiment of the market.
The largest layer of the hierarchy, the bottom layer, deals with our physiological needs, such as breathing, eating and drinking. Many of these are instinctive or involuntary and without them, the subject would die.
The second layer of Maslow’s needs relates to personal safety and stability which extends to financial security, serenity and well being of the family. This relates directly to Forex traders by emphasizing the importance of achieving personal safety before seeking financial security. All FX professionals regularly stress the importance of trading only with money you can afford.
The third level deals with the need to belong; friendship and family. The successful trader will find they need the support of other professionals, analysts and account executives to become comfortable and confident when he trades a live Forex account. This is the point where damaging emotions such as fear of loss or failure and greed for excessive profits can take over. These by themselves, or in combination with each other, have the power to destroy what could have been a promising trade.
At the fourth level we begin to encounter the positive needs and emotions that trading can engender; a rise in self-esteem as a result of successful trading and the rise in confidence as your skills develop. You’ll find yourself no longer glued to screens, studying charts, indicators and drawing lines. You’ll also sense real achievement when using your profits for something tangible.
Once you’ve achieved these middle levels consistently and mastered them, you will be ready to move on to the self-actualization level, where you can aspire to be a better 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.
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. You will also learn to respect other traders who are as successful as you are
Maslow’s needs reminds us that successful Forex trading is a journey to be taken step by step, consolidating successes and learning from mistakes, never risking more than we can afford to risk and ensuring that we keep a balance between trading and other parts of our lives. Ignoring Maslow’s needs can let a trader undermine the basic needs and 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 the basic needs because they became instinctive, we can then enjoy the rewards of successful trading; making profits, the high regard of others, a feeling of personal well-being and a level of self-confidence, which means you’re not stuck in front of the screen, scared of the market’s next move, then from there, achieving personal and monetary wealth.