By Andrew Menaker, PhD
Many traders believe that to succeed in trading, one must get rid of their ego, or at a minimum, tame their ego.
Is it really true? Nope, and I’ll tell you why.
It’s understandable why so many believe this. On the surface, it does indeed appear that it is our ego that is at the root of our greed. It also seems as though it is our ego that doesn’t allow us to accept loses, or makes us impatient as we wait for the best entry.
Describing the ego and its function is beyond the scope of this post, but I will address a very widely held misconception about ego.
What are the reasons why you trade? Make money. Create a different lifestyle. Etc. Go ahead and think about your own reason(s).
It’s very likely that some, if not all of the reasons will emanate from a type of desire or ambition.
And where does desire and ambition come from? It comes from the ego.
So, perhaps you can see in trading we have a psychological conundrum. On the one hand it appears that ego is a problem, on the other hand it is ego that propels us forward.
When is enough, enough? Psychologically, how does greed work? Why is it difficult to accept losses and why is it so hard to be wrong?
And does it mean that you can’t be religious or a spiritual person and also succeed in trading. That’s not the case at all, but it does present some issues that need to be addressed.
The role of the ego in trading is an area that requires a lot consideration, well beyond the scope of a blog post. For that reason, it will be one of the topics addressed in the Elite Trading Forum live interactive discussions.
Andrew Menaker PhD is a trading psychologist; you can read more about him at http://www.andrewmenaker.com