Welcome back to our discussion on Napoleon Hill’s work The Law of Success in 16 Lessons.

If you’re just joining us or would like a refresher on the Laws of Success, they are:

1. A Definite Chief Aim
2. Self-Confidence
3. Habit of Saving
4. Initiative and Leadership
5. Imagination
6. Enthusiasm
7. Self-Control
8. The Habit of Doing More Than Paid For
9. Pleasing Personality
10. Accurate Thinking
11. Concentration
12. Cooperation
13. Profiting by Failure
14. Tolerance
15. Practising the Golden Rule

Napoleon Hill defines enthusiasm as “a state of mind that inspires and arouses one to put action into the task at hand…it is contagious, and vitally effects not only the enthusiast, but all with whom he comes into contact.” Enthusiasm “energizes the body” and “makes work seem less difficult or monotonous”. It’s fine to have a Definite Chief Aim that you can clearly imagine and have the self-confidence to achieve, but at some point, you need to buckle down and get to work! To be a trader, you first need to learn how to trade, and then work to find trading setups and opportunities for making money. This is where some enthusiasm will really help you!

One example of enthusiasm that I often reflect on revolves around a youth group I was a part of many years ago. We started out as a group of people who, for the most part, had very little experience in running a youth group. However, the youth group quickly flourished, growing to large numbers, putting on all sorts of events, and having a lot of fun along the way. Looking back, I sometimes wonder how we made it all work, given that our leadership team was quite large, and was made up of very different people with very different opinions! On reflection, there are two things that were in our favour from the start – we all shared a Definite Chief Aim, and we all had enthusiasm. We were passionate about the project, and we enjoyed working on it.

Now in trading, you’re most likely not going to be part of a group, because the majority of traders work alone. However, once you have your Definite Chief Aim, such as making $10,000 per month from trading, then it’s amazing how far a little enthusiasm can take you! In the lesson on enthusiasm, the author describes an experience of working on a manuscript in the evenings. One night, he looked outside and thought that the light of the moon looked a little bit different to usual. He quickly realised that it wasn’t the moon at all – it was the sun! He had been working all through the night and hadn’t realised it! He attributed this to his enthusiasm for the project.

If the idea of staying up all night doesn’t appeal to you, don’t worry – it’s not necessary to stay up all night as a trader and it’s been a long time since I pulled an all-nighter. That’s not my idea of fun! But the lesson simply shows that you can achieve a surprising amount of work, almost effortlessly, with the right levels of enthusiasm.

So how can we build a state of enthusiasm to help us achieve our Definite Chief Aim? You might be thinking “that’s all well and good, but I’m just not an enthusiastic person.” Well, I’m sure one day the pharmaceutical companies will find a way to bottle enthusiasm, but in the meantime, we will have to be a little bit more creative.

Napoleon Hill stated that “successful people have discovered ways and means which they believe best suited to their own needs to produce stimuli which cause them to rise to heights of endeavour above the ordinary.” In other words, it is possible to generate our own enthusiasm. Here are seven ways the author suggests for those looking to lift their levels of enthusiasm:

1. Being in an occupation that you love

Have you ever felt flat, bored, uninterested or lethargic while at work? I can certainly say that I have been in jobs that frequently evoked all those feelings! I was told very early on in life that if I could find a job that I loved doing, then I would never work a day in my life, and that’s exactly how I feel about trading – I love doing it! I enjoyed learning how to trade, I love performing market analysis and I love watching markets unfold. If you took away the money, I would still enjoy trading. Perhaps I’m a little bit strange like that 🙂 Nevertheless, I’ve never struggled for enthusiasm when it comes to trading.

Now of course, if you’re in a role that you’re not enthusiastic about, you may not be able to just get up and quit, especially with interest rates going up and the cost of living skyrocketing. However, now is a great time to try out trading. Who knows, you might love it as much as I do!

2. Being in an environment where others are enthusiastic and optimistic

One of the great things about trading is that we generally work for ourselves. There are no pesky co-workers to come in and spoil our mood! Of course for some people, working alone is a challenge when they begin to trade, because they like to talk and interact with others. For those people, we often recommend finding a friend or family member who is interested in trading and working together with them. It’s amazing what two people working together can achieve as they set out in pursuit of a Definite Chief Aim. Napoleon Hill called this a “Master Mind” alliance.

3. Financial success

This one is a bit of a no-brainer – of course you’re going to be more enthusiastic about trading if you’re making money from it! But it’s not always easy to make money from trading in the beginning, and as in all professions, there are traders who don’t succeed in this field.

My suggestion to new traders who are starting out is to try and bank some small profits. Making small profits will give you confidence and enthusiasm to continue your journey as you build up to larger profits.

You don’t have to capture every single part of a move to be a highly profitable trader. David Bowden, the founder of Safety in the Market, set himself the goal of capturing 50% out of each move in the market. Start small and then go big. Traders who start out trying to make a million dollars from each trade generally end up frustrated that they are not bringing in any money, and often quit, so start by banking small, consistent profits and then watch that enthusiasm grow!

4. Mastery of the Laws of Success

I have always enjoyed the idea of personal growth and personal development – perhaps because I had so many flaws and failings that needed (and still need!) working on. Whenever I read a book or attended a course or seminar that taught me something useful, I always felt more energized, more positive and more enthusiastic. The Law of Success by Napoleon Hill is a massive book even in two volumes, and it took me a long time to read. But I would read a little bit each day and always feel more encouraged after reading it.

Another author whose books I enjoyed reading was WD Gann, the famous trader upon whose work Safety in the Market’s Active Trader Program is based. They are not an easy read, but Gann wrote in a very encouraging manner, and I always felt more enthusiasm after reading his work.

5. Good health

Both physical health and mental health are important for traders, and working on either or both of them is going to lift your enthusiasm levels. There are many approaches that you can try here, such as meditation, getting more exercise, eating healthier foods, and improving your sleep quality.

One of the things that I’ve learned over the years is that for most things in life, there is no one, single correct way to do things that works for everyone. I have seen it with diets, where one person swears by a new diet while the next person sees little gain from it. I have also seen it in the markets – the ideal market or methodology for one person isn’t always right for everyone, which is why in the Active Trader Program we encourage you to fine-tune your system based on your own personality and strengths.

So if you find yourself feeling less than enthusiastic, sometimes all you need to do is go for a walk or eat a piece of fruit. Try it, and find what works for you!

6. Knowledge that one has served others in some manner

WD Gann said that “the greatest pleasure in life comes from helping those who are trying to help themselves.” One of the best parts of being a Safety in the Market instructor is when I hear about the success stories of our students. Sometimes, they are big wins, like a 17 to 1 Reward to Risk Ratio on a trade, or a $300,000 profit in a week, but even the small wins make me smile, perhaps when someone takes their first winning trade, or banks their first profit. It’s all about progress, and everyone moves forward at their own pace. Ultimately, each student’s success is up to them, not me – but it’s still nice to hear about those wins!

7. Wearing good clothes, appropriate to the needs of one’s occupation

The final method Hill suggests for increasing enthusiasm is to wear good clothes. Now this one is DEFINITELY not my area of expertise! I remember once wearing a football jersey to a semi-formal occasion! However, although I may not be the most fashionable person, I know that when I wear certain clothes, they make me feel a certain way.

Private traders working from home don’t need to wear any particular uniform, so we have the freedom to wear anything that feels good! Why not try experimenting with your wardrobe and seeing what happens?

Now I’m sure there are many, many other ways to generate enthusiasm, but these are a good starting point to consider.

Before we finish, I want to consider the question of whether it’s possible to have TOO MUCH enthusiasm. In trading, there are three key times you’ll want to be careful about being overly enthusiastic.

The first time is when you are starting out. This is when it’s easy to be enthusiastic, but also easy to be unrealistic because you haven’t yet experienced the range of emotions that the market can bring up in you. The way to handle this is to prepare thoroughly. Do your work so that you understand the techniques (Safety in the Market students can ask as many questions as they need to the Trading Tutors Support Service), and then test them thoroughly. Then, start out with small positions while you find your feet. Be wary of letting your enthusiasm talk you into trading too many positions, or taking positions that are too large for your account size!

The second time to be wary about too much enthusiasm is after you have had a losing trade. I have seen traders throw themselves enthusiastically back into the market as quickly as possible to try and make the loss back immediately. This is a dangerous time because our emotions can still be affected by the previous loss. In these cases, you need to be careful to stick with your trading plan and wait for the right setup. Forget about the loss, it’s part of trading. Don’t chase it – it’s gone. Just wait for the next trade. It’s closer than you think.

The third time to be wary about too much enthusiasm is after you take a big winning trade. This is when your enthusiasm levels around trading will be at their absolute peak. It’s a great time to go and do some further study, but it could be a dangerous time to take a trade because this is where you are most likely to overtrade, full of confidence in your abilities because of one big winning trade.

At the end of the day, I would rather that a trader have too much enthusiasm than too little enthusiasm because it can be managed. It is usually easier to manage an overabundance of enthusiasm (and we will look at this in our next lesson on Self-Control!) than it is to generate enthusiasm when it does not exist.

A great way to keep track of not only your enthusiasm but of all of your emotions around trading is to keep up a trading journal. This simply involves writing down how you feel before, during and after a trade. You’ll be surprised at what you learn about yourself by tracking your thoughts in a journal. – I remember doing this for a month and thinking  it was a waste of time. However, when I read back over my thoughts, I picked up on an unhelpful thought process and learned something about myself that I would not otherwise have learned. Try it and see – you may be pleasantly surprised!

Action items:

• Reconsider your Definite Chief Aim from the first article. When you read it out loud, are you energized by it, and able to jump straight into working to bring it about? If not, how could you alter your Definite Chief Aim to elicit more enthusiasm?
• Choose at least one of the seven methods for raising enthusiasm levels that were discussed in this article and try it out in your own trading and in your life.
• Keep a trading journal for the next two weeks, writing down how you feel before, during and after a trade, then read over it and see what you learn about yourself.