Archives of “ego” tag

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Self-Awareness

  
  Education
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“You can’t kid yourself in trading. You have to deal with who you really are, and take responsibility for all your shortcomings, which the markets have a way of revealing rather starkly. You have to confront all your fears and tame them. You have to check your ego at the door.

 You learn from each experience. There’s nothing in life that you can do that can guarantee that you’re not going to go through some pain. Trading is certainly not a singular pursuit in that regard. What I have learned is this: Patience and diligence are rewarded. Profits will eventually accrue if you do the right thing and stick with it. That’s the most important thing!

 

Trading Without Ego

  
  Education
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Make no mistake about it. A trader’s self concept has to be separate from the trading. Who you are as a person began before you ever thought of trading and who you will be as a person will extend beyond your trading. When personal self-worth entwines with trading, it not only damages self esteem, it sabotages the trading.

You hear about it. You read about it. Don’t be misled. Traders tell stories. They write stories. They tell how great they are. Big trades. Big numbers. Big egos. Hubris. And sooner or later, big downfalls. It goes with the territory.

Consider the outsized egos of certain traders who brought themselves and those associated with them to ruin. Nicholas Leeson brought down the Barings Bank. Victor Niederhoffer ran his fund into deficit. John Merriweather threatened the health of our banking system by betting more than fifty times his capital that his strategies were certain to work, that he could forecast with impunity the direction of various bond markets. There’s a pattern here of seeming or real success for a while and then collapse for themselves and for those caught up in blindly following them. (more…)

Desire -Skill

  
  Education
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The Desire
If you are trading just for the money you will quit before you are successful, Why? Anyone without a love for the game will quit during the long difficult learning process. After hundreds of hours of work and years of trading with nothing but a loss to show for all the effort anyone with common sense will think it is too hard and just quit. Those with a love and passion for trading will eventually succeed and usually make six figures or become a millionaire for their efforts. Those that do a cost benefit analysis in the first few years will generally quit due to the math.
The Skill
A trader must have the skill to trade in three dimensions. The management of the mind,  the method, and money management are all crucial for success. Traders must have the discipline and perseverance to trade robust systems through different market environments without giving up. They must have the ability to accept and deal with their thoughts and emotions as they arise during both winning and losing streaks. Risk must be managed on every single trade without the ego causing bets so big that they put your future trading at risk. The trader must also have the skill to not let fear take away the traders ability to pull the trigger on a good entry.

Ten Questions to ask Yourself Before Every Trade

  
  Education
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If you are just randomly trading what you like with no real underlying system, method or planning then unfortunately your odds of success in the long term are slim. Trading a winning methodology is what creates an edge in trading.

Consistently trading a robust system or methodology enables you to trade in a way that historically wins, controls risk, and does not bring your ego and your emotions into your trading in a destructive way.

Ten questions to ask yourself before every trade:

  1. Does this trade fit my chosen trading style? Whether it is:  swing trading, momentum, break out, trend following, reversion to the mean, or day trading?
  2. How big of a position do I want to trade? How much capital am I going to risk? Am I limiting my risk to 1% or 2% of my trading capital?
  3. What is my risk of ruin based on my capital at risk?
  4. Why am I entering the trade here? What is the trigger to trade?
  5. How will I exit with a profit? A price target or trailing stop? (more…)

40 Rules for Traders

  
  Education
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1. Trading is simple, but it is not easy.
2.  When you get into a trade watch for the signs that you might be wrong.
3.  Trading should be boring.
4.  Amateur traders turn into professional traders once they stop looking for the “next great indicator.”
5.  You are trading other traders, not stocks or futures contracts.
6.  Be very aware of your own emotions.
7.  Watch yourself for too much excitement.
8.  Don’t overtrade.
9.  If you come into trading with the idea of making big money you are doomed.
10.  Don’t focus on the money.
11.  Do not impose your will on the market.
12.  The best way to minimize risk is to not trade when it is not time to trade. 
13.  There is no need to trade five days a week.  
14.  Refuse to damage your capital.
15.  Stay relaxed.

16.  Never let a day trade turn into an overnight trade.17.  Keep winners as long as they are moving your way.
18.  Don’t overweight your trades.
19.  There is no logical reason to hesitate in taking a stop.
20.  Professional traders take losses because they trust themselves to do what is right.
21.  Once you take a loss, forget about it and move on.
22.  Find out what loss parameters work best for your setup and adjust them accordingly.
23.  Get a feel for market direction by “drilling down” (looking at multiple time frames).
24.  Develop confidence by knowing and executing your trade setups the same way every time.
25.  Don’t be ridiculous and stupid by adding to losers.
26.  Try to enter a full size position right away.
27.  Ring the register and scale out of your position.
28.  Adrenaline is a sign that your ego and your emotions have reached a point where they are clouding your judgment.
29.  You want to own the stock before it breaks out and sell when amateurs are getting in after the move.
30.  Embracing your opinion leads to financial ruin.
31.  Discipline is not learned until you wipe out a trading account.
32.  Siphon off your trading profits each month and stick them in a money market account.
33.  Professional traders risk a small amount of money on their equity on one trade.
34.  Professional traders focus on limiting risk and protecting capital.
35.  In the financial markets heroes get crushed.
36.  Stick to your trading rules and you will never blow up your trading account.
37.  The market can reinforce bad habits.
38.  Take personal responsibility for each trade.
39.  Amateur traders think about how much money they can make on each trade.  Professional traders think about how much money they can lose.
40.  At some point all traders realize that no one can tell them exactly what is going to happen next in the market.

Uncoupling your EGO

  
  Education
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your_ego“If you think that you are God and you go into the financial markets ,you are going to come out broke.The fact that Iam not broke proves that I don’t think Iam God “-George Soros on Sixty Minutes.

Make no mistake about it.A traders’s self concept has to be separate from his trading.Who you are as a person began before you ever thought of trading and who you will be as person will extend beyond your trading.When personal self -worth entwines with trading ,it not only damages self-esteem ,it sabotages the trading.

“Authentic freedom cannnot be experienced untill one learns to tame the ego and move out of self-absorption.”

 

Why do most traders lose money?

  
  Education
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stoplosingmoneyBecause they would rather lose money than admit they’re wrong. What is the ultimate rationalization of a trader in a losing position? “I’ll get out when I’m even.” Why is getting out even so important? Because it protects the ego. I became a winning trader when I was able to say, “To hell with my ego, making money is more important.”

I Trade In The Zone.

  
  Education
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  1. I Trade In The Zone’. I Trade IN The Moment, IN The Present, With Total Disregard For What Others Think & Feel About Me.
  2. ‘I Trade In The Zone’. I Ignore ALLEmotions & Defensive Perspectives. I Trade; I Do, I Act From An Entirely Detached & Impartial Perspective.
  3. ‘I Trade In The Zone’. Only In The Zone Do I See The Market As It Truly Is.
  4. ‘I Trade In The Zone’. I Block Out ALL Bad Habits & Self-Limiting Beliefs Attained From My Past, My Environment & Their Surrounding Noise.
  5. ‘I Trade In The Zone’. My Mind Is Pure, Clear, Focused & Yet Empty. The product Of‘Choice’ Means I ALWAYS Can; At Will, ‘Trade In The Zone’.
  6. ‘I Trade In The Zone’. I Trade Without Ego, Never Reacting To Pain, Sorrow Or Fear. I Just Trade The Market As It Truly Is. I Am A Super Trader, I Am The Master Of My Emotions, & So I Can Trade In The Zone. ‘I TRADE IN THE ZONE’.
  7. ‘I Trade In The Zone’. Trading In MY Zone Means I Distinguish Actual Reality From My Interpretations & Projections Of Reality. I Control The Zone!
  8. ‘I Trade In The Zone’. Only In The Zone, My Centred State, Can I ‘Super Trade.’ I Flow With Trends, I Spot Reversals & Breakouts; I Cut Losses Without Hesitancy & Let My Profits Run Perpetually. ‘I Trade In The Zone’.
  9. The Zone Is Where I Live; It’s My Nirvana, My Sanctuary, My Paradise, My Heaven.
  10. I LIVE & TRADE In The Zone. The Zone Is In Me; & The Key To Enter Is Within Me Forever!

Courage

  
  Education
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Not all traders have the courage to stand up to their actions. It takes a lot of courage to deal with the fears a trader must overcome in his career. The first is the fear of success that is so common and is the most prevalent. We want success and are afraid of it at the same time too. As our account grows so does the fear of handling those amounts of money. Could you trade risking a bigger amount as the account grows? Sometimes we sabotage our own success as it puts us out of our comfort zone. Another aspect of the fear of success is the subconscious fear of not being able to sustain that success. Our ego is questioning our ability to avoid messing up and losing that prized status of a hero. Same holds true for a windfall success. We know we might be able to do it again but our ego says we will look bad if we cannot do it again. Professional Traders have developed the ability to methodically achieve success and the confidence to repeat it while reducing the odds of sabotaging themselves via their egos. Professional Traders know that trading is boring and is not full of fun and excitement. That is why they have the courage to give up the fun and excitement in exchange for trading capital preservation. They also have the courage to not become addicted to winning big all the time. They know there will be singles, doubles and losers along the way too. They have the courage to stay on the sidelines at times and miss trading opportunities. They also know when to get out of a trade bravely and have the courage to ask for help when needed. They have the courage to stick to their strategy, ask dumb questions, admit it when they are wrong and finally have the courage to trade for profit and not for pure excitement.

Trading Rules for Thirsty Traders

  
  Education
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“Don’t ever put your ego out there where you’re afraid to say that you’re wrong, because the market is right and you are wrong. Respect that.”

 “If you’re right at the wrong time, you’re wrong.”

 “The markets are like water. They will flow to the weakest point that they can push through, and they always do.”

“The market is smarter than you will ever be, with its combined knowledge of all participants. Pay attention to the signs. Be quick to admit that you’re wrong. Don’t be afraid to miss something.”

 “I believe money is fascist. It craves stability more than anything else. Nothing bothers money more than uncertainty.”

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