Ego and Trading

[Tradewinds 12]

"Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself."

 

"Trading Without Ego"

by

Ruth Barrons Roosevelt

 

I searched threads for the word "ego" in the title, and there were no results, so I thought I'd start a thread titled "Ego and Trading".

 

My opinion is, that trading is a mixture of playing against the market and against ourselves.

 

What is the Ego made up of? How does it affect trading? Is there a good and a bad Ego? The implication is, that Ego is bad, and it hurts our trading results. The Ego is about ourselves. The negative implication of Ego, is that it is an inward and selfish thing, something that leads us to believe false things and deceive ourselves, which then leads to irrational and self-destructive behavior.

 

In trading, it could take the form of thinking that we know something, when we really don't know much, and in fact might just be fooling ourselves. Or it may take the form or thinking that we can will the market to do what we want.

 

What do you think?

[SIUYA 11]

taking away all the sayings we know and love - eg; dont fight the market, be flexible, the market does not care, the market is always right, etc; etc;

and adding into the mix the various descriptions of ego and the ideas associated with what ego is, and how we relate to it.

 

my two cents....

Ego and trading dont mix.

the market is not a place to find your self, but the market will definitely find you out

[MightyMouse 12]

Pride, the symptom of ego, is one of the seven deadly sins.

 

I read somewhere at some point that if someone were to say something to you that would have the affect of "crushing" your ego, that you should thank them instead of feeling hurt.

 

The fear of loss is the fear of doing damage to your ego.

 

I started a thread to post es trades or other short term trades as legitimately as possible. In doing so, I am bare naked. There can be no lies. There is a level of vulnerability, but for me it is a trace feeling. I used to care, but i really do not care what anyone thinks if they do not see me make money or if what i do appears to be a mistake to others or whatever the case may be. I have been the only one posting trades. My guess is that traders risk exposing the reality of their trade decisions and that causes pain or anxiety. It is easier and best to protect their egos and say they made money without showing that they actually made decisions that lead to profits.

 

Of course, I could be completely wrong about that.

[TheNegotiator 13]

I think we trade the markets but we hinder ourselves much of the time in various different ways including with our egos. The trouble is, self belief and conviction can easily be confused with what is actually ego. But self belief and conviction, once you have grasped a greater proportion of the day to day realities of the markets you trade, are of course what can make you a great trader. But also, self belief and conviction can also be mistakenly misplaced from a different profession or endeavour into trading, where the game can be quite different. You then see a new trader with potentially fantastic attributes to trade, shrivel up and shy away from the personality that may have made them one day, a highly successful trader.

 

My belief is therefore to be a success in trading, either be a confident thinker about all these psychological aspects combined with market dynamics, or don't think about ego at all. Just do what works and look after your account. There have many very successful traders in the past who weren't necessarily the most academically gifted. Historically you'd see this in the pit. Ultimately for many of these guys it was about fight or flight.

[Tradewinds 12]

It is easier and best to protect their egos and say they made money without showing that they actually made decisions that lead to profits.

 

Of course, I could be completely wrong about that.

 

It's not just trading, people don't go around "spilling their guts" about their flaws and failures. It's a mentality of not showing weakness. Pain avoidance is hardwired into our brain.

 

I've been developing my trading skills and my strategy for over 3 years. I have lost some money trading, but maybe a couple thousand at the most. The reason I haven't lost much money, is because I trade only simulated trading for the most part.

 

My ego wants to be successful, make a lot of money, and feel like I actually know what I'm talking about. But before I get to that point, I can either participate, or be afraid of getting involved in discussions. It's part of the learning process.

 

One thing I have noticed, and it's not just trading, is that when people have put a lot of time and effort into learning something, sometimes they get a bad attitude. I help people on a programing group, and I answer even the stupidest questions with a helpful and encouraging demeanor. It's because that's the kind of person I want to be. In the beginning, I just started posting what I had figured out on my own. And I was annoyed at these people who have this superiority complex because they are at a higher level than others. It sometimes happens, that more experienced people act like a new person who doesn't know anything is like an annoying bug that should be squashed.

 

So that's part of the reason people don't make their failures and weaknesses known.

 

But back to your point. It's good to be transparent, and stop caring about what other people might think.

[Tradewinds 12]

Whenever I get on the bad side of a trade, I think to myself, "If I can only get out of this trade at a one tick profit." Then I put in an order to exit at the smallest possible profit. What often happens, is that the price comes back to a profit, goes through my exit, and keeps on going. :crap:

My point is, I need to do what my indicators tell me to do. So I program signals that tell me what the pressure is on the price.

[SIUYA 11]

Whenever I get on the bad side of a trade, I think to myself, "If I can only get out of this trade at a one tick profit." Then I put in an order to exit at the smallest possible profit. What often happens, is that the price comes back to a profit, goes through my exit, and keeps on going. :crap:

My point is, I need to do what my indicators tell me to do. So I program signals that tell me what the pressure is on the price.

 

error number one - you are in a bad trade - get out.

Instead you stick in an order to get out for a one tick profit......that to me is insanity, because you have already decided its a bad trade. If it finally becomes a good trade - through luck/chaos/randomness.....you decide to exit.

This is a plan designed to keep losers and exit winners.

 

you would be better off working out how to exit quickly- when the trade goes badly, and then being prepared to re-enter....and not sit there and think as many do - "well the market screwed me again"

[Tradewinds 12]

you are in a bad trade - get out.

Instead you stick in an order to get out for a one tick profit......that to me is insanity,

 

Yes. It is insanity! :rofl: You are right. Which actually might be a helpful bit of information. I can tell myself. THIS IS INSANITY!! Hopefully it will motivate me to change my behavior. We will see. If I ever do become sane, I'll post my equity curve to prove that I won the internal battle.

[Tradewinds 12]

you would be better off working out how to exit quickly- when the trade goes badly,

 

Yes, true. I spend a lot of time working out signals for trend reversals, and when to lock in profits, but I still don't have the exit strategy for a bad trade defined. The battle goes on. I need to drive a short sword through the guts of those loosing trades. Just kill them, and go on to the next victim.

[MightyMouse 12]

It's not just trading, people don't go around "spilling their guts" about their flaws and failures. It's a mentality of not showing weakness. Pain avoidance is hardwired into our brain.

 

I've been developing my trading skills and my strategy for over 3 years. I have lost some money trading, but maybe a couple thousand at the most. The reason I haven't lost much money, is because I trade only simulated trading for the most part.

 

My ego wants to be successful, make a lot of money, and feel like I actually know what I'm talking about. But before I get to that point, I can either participate, or be afraid of getting involved in discussions. It's part of the learning process.

 

One thing I have noticed, and it's not just trading, is that when people have put a lot of time and effort into learning something, sometimes they get a bad attitude. I help people on a programing group, and I answer even the stupidest questions with a helpful and encouraging demeanor. It's because that's the kind of person I want to be. In the beginning, I just started posting what I had figured out on my own. And I was annoyed at these people who have this superiority complex because they are at a higher level than others. It sometimes happens, that more experienced people act like a new person who doesn't know anything is like an annoying bug that should be squashed.

 

So that's part of the reason people don't make their failures and weaknesses known.

 

But back to your point. It's good to be transparent, and stop caring about what other people might think.

 

The fun thing about trading is that we are all really equal. No one is better than the other. An Individual's insecurity coupled with the boastful ego of another make him think that he is not as good.

 

I guess a good start for you if you are trading sim might be to first stop caring what people think.

[jaysmith124 10]

Be aware of others messages. How the mind can misinterpret what others say. How somebody eles truth may not be applicable to your truth, and how the most accurate truth may not fit either your truths. (Beliefs) There has to be a balance. “Trading Without Ego” is in reference to bad ego. It is an ego that is masking insecurities about not being good enough, the truth, and limiting personal growth.

 

Enthusiasm, ambition, pride, dignity, confidence, and a healthy egoism may appear threatening, and misinterpreted, by others. Someone will easily label us as being narcissistic, arrogant, and egotistic. Epigones will follow suit. If we are worried about what others think, you will adopt their beliefs in order to belong, feel loved, and to be accepted. We underestimate ourselves. We will have limited your potential by satisfy human needs and values based on others, and societal, expectations not what is in your best interest on a path of growth toward your potential, and peak experiences. We will have chosen to be a doormat controlled by others, and making us feel that we don’t have the right to be our own person. We can at least try to break away from our limitations.

 

[ame=http://www.youtube.com/watch?v=YKQcx1jzn4k&feature=related]YouTube - One Flew Over the Cuckoo's Nest: At least I tried[/ame]

 

It is important to find where we fit in the realm between good, and bad. We need to understand, and capitalize, on our strengths. We need to unmask our weaknesses, foibles, all while appropriately satisfying human needs, and our most important values. To let go of what we cannot control, and go with the flow. To be in control of how we think, feel, and behave. If we have negative garbage in other areas in life such as ego, relationships, job career, finances, emotionally unstable from past traumas, it is reflected in our trading today.

 

Trying to control situations is a defense to maintain a sense of safety and certainty. We need to break away by at least trying. Trying means summoning the courage to step into an environment of uncertainty. Poetic justice will leave us with a decision to change, quit, or relish in peak experiences.

 

Many times an emotional trauma turns out to be the catalyst, and motivation for change. One day we just decide. Decide to break away from our limitations.

 

[ame=http://www.youtube.com/watch?v=nrQ9evXIIe4&feature=related]YouTube - One Flew Over The Cuckoo's Nest Ending[/ame]

Edited April 16, 2011 by jaysmith124

[ahimsa 10]

Be aware of others messages. How the mind can misinterpret what others say. How somebody eles truth may not be applicable to your truth, and how the most accurate truth may not fit either your truths. (Beliefs) There has to be a balance. “Trading Without Ego” is in reference to bad ego. It is an ego that is masking insecurities about not being good enough, the truth, and limiting personal growth.

 

Enthusiasm, ambition, pride, dignity, confidence, and a healthy egoism may appear threatening, and misinterpreted, by others. Someone will easily label us as being narcissistic, arrogant, and egotistic. Epigones will follow suit. If we are worried about what others think, you will adopt their beliefs in order to belong, feel loved, and to be accepted. We underestimate ourselves. We will have limited your potential by satisfy human needs and values based on others, and societal, expectations not what is in your best interest on a path of growth toward your potential, and peak experiences. We will have chosen to be a doormat controlled by others, and making us feel that we don’t have the right to be our own person. We can at least try to break away from our limitations.

 

 

It is important to find where we fit in the realm between good, and bad. We need to understand, and capitalize, on our strengths. We need to unmask our weaknesses, foibles, all while appropriately satisfying human needs, and our most important values. To let go of what we cannot control, and go with the flow. To be in control of how we think, feel, and behave. If we have negative garbage in other areas in life such as ego, relationships, job career, finances, emotionally unstable from past traumas, it is reflected in our trading today.

 

Trying to control situations is a defense to maintain a sense of safety and certainty. We need to break away by at least trying. Trying means summoning the courage to step into an environment of uncertainty. Poetic justice will leave us with a decision to change, quit, or relish in peak experiences.

 

Many times an emotional trauma turns out to be the catalyst, and motivation for change. One day we just decide. Decide to break away from our limitations.

 

YouTube - One Flew Over The Cuckoo's Nest Ending

 

hi jaysmith,i think to misrepresent when you talk about to "we will chosen to be a doormat controlled by others,please can you explane better?,because i think that nobody wants to be controlled in every time...for my civil way to see the things i saw this like an abuse and a mould of violence.for the ego instead.i like the einstein thought,he said that the true value of a man we can see when he free himself from ego and become an adult.but everyone of us,in some time of life,especially when we have some fear,hide ourself in the child side and maybe just for this.. we can't destroyed completely the ego.

[jaysmith124 10]

hi jaysmith, please can you explane better?,

 

he free himself from ego and become an adult.but everyone of us,in some time of life,especially when we have some fear,hide ourself in the child side and maybe just for this.. we can't destroyed completely the ego.

 

"we have chosen to be a doormat controlled by others"

 

What I mean by "Doormat" is that we let people take advantage of us. In psychology, doormat syndrome is used to describe passiveness, or being submissive. Doormat Syndrome is where an adult survivor goes out of his, or her way, sacrificing their own happiness to please the other.

 

This is when one chooses to be abused verbally, (psychologically) or physically. I am using the term to express how we, at times, accept abusive messages such as labeling that does not apply to us, yet we do not defend ourselves in the name of being magnanimous, “buying into it”, or being “walked on”, in the name of a higher goodness, which sometimes it is justified if in the Adult state, but other times it is abusive if in the Child state. A child who feels helpless, powerless, inferior, and feels like a victim who sacrifices their self worth, esteem, self-image, dignity, significance, and self-respect. It is your ego that holds these values.

 

I say choose to be this way, because we can find this passive communication, and/or behavior, habitual, as does others, in our relationships. Others who’d rather you not change. They like you the way you are. We think, and feel, like a victim of our circumstances. When this passive/submissiveness happens in other areas in our life we are in a child state, a state that is reflected in the markets. We attribute events to forces outside of ourselves. . When the truth is that a child contaminate adult reacted with passive behavior sacrificing what is in the adults best interests. Instead, the adult chooses to be assertive respecting his/her own rights, a right to stay on a planned path of growth, while respecting others rights. One must respect his/her own rights first before others. One must love him/her self, before truly loving others, etc. Others will incorrectly call you selfish. This is when you check yourself, but most of the time it will be a comment made by someone who wants to control your behavior either directly, or indirectly.

 

The good ego reflects our values of self-esteem, self-image, and significance. Values we do not want to violate. It is from an Adult state that we respect these values, and it is the Adult state that we respect the rights of others. But we don’t want to passively give away our power/control, and rights, to please others aggressiveness--an aggressiveness that does not respect your rights.

 

It is from a false ego that we will enter a child state, and become self-destructive, or disrespect others. I conclude with the fact that we need to check our ego at the door, not leave it at the door. But, preferably, we need to establish a healthy ego devoid of a false ego in all areas of our lives. It is a choice to stay in our Adult state. It is the state where we first base our decisions on reason, logic, and the present. Uncontaminated by, often, destructive emotions of the Parent, or Child, states that come from past, or future, thoughts.

Edited April 17, 2011 by jaysmith124

[jaysmith124 10]

When does somebody cross the line, from enthusiastic, ambition, pride, dignity, confidence, and healthy egoism over to being narcissistic, arrogant, and egotistic?

When he/she cannot put their money where their mouth is. The worst that can happen is that you are humbled. You will find out if you’ve crossed the line by trying.

 

Like McMurphy, I am trying to escape from being controlled. I am being limited (stuck) by my own mind. I have felt it inside of me. Something has been stopping me from doing what I have to do to get to where I want to go. It is something deep rooted in the sub-conscious. The answer to confidence, and motivation, to “just do it”, has been on the tip of my tongue--just out of reach of my consciousness. Up until recently, it has been like, I was just not ready. Like the Chief, I have come to the point where I have had it. I can’t take it any longer. I am ready to break away.

 

I don’t care what others think. It may be humbled back to the other side of the line into reality. Or, as I believe, I will be the awesome intrepid trader, I think I truly am, pulling money from the market everyday.

 

I am documenting my results for at least thirty trades.

Psychologically ready?

[MightyMouse 12]

When does somebody cross the line, from enthusiastic, ambition, pride, dignity, confidence, and healthy egoism over to being narcissistic, arrogant, and egotistic?

When he/she cannot put their money where their mouth is. The worst that can happen is that you are humbled. You will find out if you’ve crossed the line by trying.

 

Like McMurphy, I am trying to escape from being controlled. I am being limited (stuck) by my own mind. I have felt it inside of me. Something has been stopping me from doing what I have to do to get to where I want to go. It is something deep rooted in the sub-conscious. The answer to confidence, and motivation, to “just do it”, has been on the tip of my tongue--just out of reach of my consciousness. Up until recently, it has been like, I was just not ready. Like the Chief, I have come to the point where I have had it. I can’t take it any longer. I am ready to break away.

 

I don’t care what others think. It may be humbled back to the other side of the line into reality. Or, as I believe, I will be the awesome intrepid trader, I think I truly am, pulling money from the market everyday.

 

I am documenting my results for at least thirty trades.

Psychologically ready?

 

Jay,

 

Once you learn how to deal with the issues you have convinced yourself you have, you will certainly be better prepared to deal with the market, but you then have the "market" to contend with which are the multitude of traders who want to pull money from you on a daily basis. They care less about you and would like to have you relapse into feeling controlled and making bad trading decisions.

 

 

MM

[ahimsa 10]

When does somebody cross the line, from enthusiastic, ambition, pride, dignity, confidence, and healthy egoism over to being narcissistic, arrogant, and egotistic?

When he/she cannot put their money where their mouth is. The worst that can happen is that you are humbled. You will find out if you’ve crossed the line by trying.

 

Like McMurphy, I am trying to escape from being controlled. I am being limited (stuck) by my own mind. I have felt it inside of me. Something has been stopping me from doing what I have to do to get to where I want to go. It is something deep rooted in the sub-conscious. The answer to confidence, and motivation, to “just do it”, has been on the tip of my tongue--just out of reach of my consciousness. Up until recently, it has been like, I was just not ready. Like the Chief, I have come to the point where I have had it. I can’t take it any longer. I am ready to break away.

 

I don’t care what others think. It may be humbled back to the other side of the line into reality. Or, as I believe, I will be the awesome intrepid trader, I think I truly am, pulling money from the market everyday.

 

I am documenting my results for at least thirty trades.

Psychologically ready?

 

Thanks its more clear now.i ask you this because i'm awareness that in trading there's a moment were the pshicology of trading blend perfectly whit the individual pshicology. I think that i wouldn't never become a doormat,neither under violence.I'm awareness of that but it's also true that someone would like that everybody of us become a doormat,and for his satisfaction...(this is for me the true egoism.to damage people,for personal gratification.)but it's also true that nobody of us sacrified his happiness for others,i remember only one christ in history...I'm happy that you are so brave to don't care what others think,it's the only way for enjoy the life.

[Tradewinds 12]

...(this is for me the true egoism.to damage people,for personal gratification.)

 

For a lot of people, hurting someone else actually makes them feel good. I wouldn't be surprised if all humans are capable of this feeling. Many people may engage in more subtle but similar behavior, and not allow their conscience to bother them.

[ahimsa 10]

For a lot of people, hurting someone else actually makes them feel good. I wouldn't be surprised if all humans are capable of this feeling. Many people may engage in more subtle but similar behavior, and not allow their conscience to bother them.

 

 

Tradewinds,i'm very tired to be nice,gentle,tollerant with people.its useless talk with the hearth and love,for many people life is become not a challenge to common sense,but a challenge for who defame better (what orrible kind of work).they are so useless that the only aim in their life by now is reduced to talk hurting by someone.If you are good,you are in wrong because everybody can paints their life with a good purpose.if you are bad ....are bad ..if you have a dream or you a project in your life...it's very difficult to find someone that help you or give you courage for don't demoralized you.and who have the lucky to find who don't demoralize

....also here isn't good! I hope in my life to don't become never and never a tattler defamer.

[tradelab 10]

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. As Wayne Dyer said, "Authentic freedom cannot be experienced until one learns to tame the ego and move out of self-absorption."

[tradelab03 10]

The most important rule of trading is to play great defense, not great offense. Every day I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum possible drawdown.“If you made a good trade, don’t think it is because you have some uncanny foresight. Always maintain your sense of confidence, but keep it in check.”

Divorce your ego from your trading, or your money will divorce you.