A Strong Trading Mind
- Thread starter amitrandive
- Start date
A Trader’s #1 Enemy is ………
The trader’s biggest enemy is their own EGO.
Ego: a person’s sense of self-esteem or self-importance.
1. The new traders with big egos always but confidence in their trading ability before developing competence in trading. New traders that trade before educating themselves are even ignorant of their own ignorance.
2. Ego driven traders think they are special and will beat the market even without putting the required work in even though there is no evidence from their past trading that they are special.
3. Most of the stubbornness of a trader arises from the egos refusal to change, to learn, or to accept they are wrong about something.
4. The ego will make you hold a trade that is going against you in the hope that later you can prove yourself right when it reverses.
5. The biggest cause of trading too big of a position size is that you believe that you just know that a trade will be a winner so you ignore risk management in favor of confidence in an unknown outcome.
6. Traders that are arrogant enough focus on being right about predictions more than developing a robust trading methodology.
7. Ego driven traders put being right above even being profitable. Their goal is ego gratification not really profitable trading.
Successful traders trade a plan based on logic, reason, probabilities, historical prices, and risk management.
The trader’s biggest enemy is their own EGO.
Ego: a person’s sense of self-esteem or self-importance.
1. The new traders with big egos always but confidence in their trading ability before developing competence in trading. New traders that trade before educating themselves are even ignorant of their own ignorance.
2. Ego driven traders think they are special and will beat the market even without putting the required work in even though there is no evidence from their past trading that they are special.
3. Most of the stubbornness of a trader arises from the egos refusal to change, to learn, or to accept they are wrong about something.
4. The ego will make you hold a trade that is going against you in the hope that later you can prove yourself right when it reverses.
5. The biggest cause of trading too big of a position size is that you believe that you just know that a trade will be a winner so you ignore risk management in favor of confidence in an unknown outcome.
6. Traders that are arrogant enough focus on being right about predictions more than developing a robust trading methodology.
7. Ego driven traders put being right above even being profitable. Their goal is ego gratification not really profitable trading.
Successful traders trade a plan based on logic, reason, probabilities, historical prices, and risk management.
Do you know The BROKEN WINDOW Technique in Managing Money ?
Source:Money Workshop Website
New York City was much infested with crime, small and large. The Mayor of New York wanted the city to be cleansed of the crime and he requested the Police Chief to do something about it. Many a Police Chief took up this challenge and wanted to solve the problem in different ways. Some wanted more police officers to patrol, some wanted more arms and ammunition, and some wanted stricter rules and laws. Many things were tried but there were no visible results. Everyone including the Mayor was really tired and fed up. The Mayor had heard of one police officer, who used his immense psychological knowledge in handling problems. So as a last resort, he was approached.
The officer studied the problem for some time and then told the Mayor that he had found a workable solution. The Mayor was pleased and asked, “Do you want more guns? Do you want more forces to patrol? Do you want stricter laws? What do you want?”
The police officer just smiled and said, “Sir, all I need is paint.”
The solution was so simple but truly amazing. The police officer had observed that all crimes had a very small beginning, just as the mighty rivers originated from small streams. He had observed that the starting point of crime was “Graffiti Writing”. Everywhere in New York there were graffiti written especially on walls of subways and trains. No one before him had noticed that. He began by just painting all the subways and trains back, spick and span. Every time the train came and had graffiti on it, the officers painted it back. They kept on doing this without fail and the crime graph in New York came down dramatically.
It is interesting to note the psychology behind the solution. Small criminals like graffiti writers if not nipped in the bud, grow to commit bigger crimes. When these small timers noticed that even graffiti was being noticed and rectified, they were scared to commit bigger crimes and the crime rate came down drastically.
This technique is called as the “Broken Window Technique”.
If in your neighborhood a window is broken by some miscreants, the most immediate task is to replace the window and then hunt for the culprit. If this is not done, it is a sign of neglect. Not attending to the replacement will cause many more windows to be broken and maybe a house will be broken into. Huge ships have sunk with just one hole in it.
When you have a small money problem, it is vital to attend to it immediately. If not attended to it can become bigger and bigger. Some daydreamers just pray that problems disappear by themselves. No problem just disappears, but yes, problems can become more complex and grow out of proportion.
Look around now with awareness at your money issues. Do you sense any small issue out of order? It is possible that you are borrowing more than necessary. It could be that your spending is just increasing disproportionately because you are trying to keep up with the lifestyle. Maybe you have no savings. Or, you have delayed paying salary to your workers because of lack of money flow. These are all signs and symptoms like the Broken Window for you to sit up and take notice. Rectify them immediately.
Source:Money Workshop Website
New York City was much infested with crime, small and large. The Mayor of New York wanted the city to be cleansed of the crime and he requested the Police Chief to do something about it. Many a Police Chief took up this challenge and wanted to solve the problem in different ways. Some wanted more police officers to patrol, some wanted more arms and ammunition, and some wanted stricter rules and laws. Many things were tried but there were no visible results. Everyone including the Mayor was really tired and fed up. The Mayor had heard of one police officer, who used his immense psychological knowledge in handling problems. So as a last resort, he was approached.
The officer studied the problem for some time and then told the Mayor that he had found a workable solution. The Mayor was pleased and asked, “Do you want more guns? Do you want more forces to patrol? Do you want stricter laws? What do you want?”
The police officer just smiled and said, “Sir, all I need is paint.”
The solution was so simple but truly amazing. The police officer had observed that all crimes had a very small beginning, just as the mighty rivers originated from small streams. He had observed that the starting point of crime was “Graffiti Writing”. Everywhere in New York there were graffiti written especially on walls of subways and trains. No one before him had noticed that. He began by just painting all the subways and trains back, spick and span. Every time the train came and had graffiti on it, the officers painted it back. They kept on doing this without fail and the crime graph in New York came down dramatically.
It is interesting to note the psychology behind the solution. Small criminals like graffiti writers if not nipped in the bud, grow to commit bigger crimes. When these small timers noticed that even graffiti was being noticed and rectified, they were scared to commit bigger crimes and the crime rate came down drastically.
This technique is called as the “Broken Window Technique”.
If in your neighborhood a window is broken by some miscreants, the most immediate task is to replace the window and then hunt for the culprit. If this is not done, it is a sign of neglect. Not attending to the replacement will cause many more windows to be broken and maybe a house will be broken into. Huge ships have sunk with just one hole in it.
When you have a small money problem, it is vital to attend to it immediately. If not attended to it can become bigger and bigger. Some daydreamers just pray that problems disappear by themselves. No problem just disappears, but yes, problems can become more complex and grow out of proportion.
Look around now with awareness at your money issues. Do you sense any small issue out of order? It is possible that you are borrowing more than necessary. It could be that your spending is just increasing disproportionately because you are trying to keep up with the lifestyle. Maybe you have no savings. Or, you have delayed paying salary to your workers because of lack of money flow. These are all signs and symptoms like the Broken Window for you to sit up and take notice. Rectify them immediately.
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