When you are trading, your ego can take center stage and become the biggest enemy of success. Ego can blind us to reality and cause us to make bad decisions that we think are good. People who let their egos get in the way will often get caught up in trading out of emotion or taking risks that are too large for their account size.
The key is to stay humble yet confident, understanding when it is time to take risks and when it is time to be careful. When confidence turns into overconfidence, you should remain vigilant and know when to back off and save yourself from making a mistake.
Remaining aware of your ego and being able to control your emotions is essential for trading successfully and mastering the psychology of trading will help set you apart from the other 95% of traders who don’t have this skill.