Getting Rid Of Ego

Discussion in 'Psychology' started by Joe Ross, Oct 7, 2005.

  1. Have you ever wondered how to get your ego out of your trading? Have you wanted to be market-centered, but find yourself consistently being self-centred?

    One thing I know for sure: your self concept has to be separate from your trading. You began as an individual long before you ever thought of trading. And you exist as an individual beyond the time you spend trading.

    When personal self-worth gets tangled up with your trading, it not only damages your concept of your personal worth, it sabotages your trading.

    You must not allow your trading errors to ruin your feelings of self-worth. You must not internalize the mistakes you make. You have to avoid feelings of guilt, persecution, and despair.

    You must learn to divorce your ego from your trading.

    In my first manuscript on trading I said that trading is a business in which there is no competition. I meant that in the sense that the only competition in trading is yourself. The market is impersonal. It doesn’t know you care about you.

    Your job as a trader is not to will the market to go where you want it to go, but rather to discover which way the market is going and join it – get in step with it.

    That means total surrender of your will to that of the market. Surrender to it and go with it. If you set your will against the market, you will invariably be smashed. Forget being right! Concentrate on the fact that the market is always right.

    Uncertainty is a part of trading. But we cannot allow uncertainty to become part of the image of ourselves. Consider, are you making any of the following ego-centric mistakes?

    • Trading without a predetermined loss exit point.
    • Trading without a predetermined objective point.
    • Not pulling the trigger on a trade, or hesitating before pulling the trigger.
    • Trading too large a size, or trading too often.
    • Marrying a trade, or marrying a market.
    • Adding to a losing trade.
    • Not taking profits when they are there on the table.

    How can we separate our ego from our trading? How do we keep from taking trades personally? How do we avoid internalizing what happens in the market, good or bad?

    One way to separate our egos from our trading is to build fences between ourselves and our trading.

    Realize that it’s “okay” if you are not right about every trade. It is not important to be right. It is important to execute and carry out your trading plan with consistency and discipline. Give yourself permission to be wrong about a trade.

    Realize that taking a loss has nothing to do with your self-esteem. Tell yourself that taking losses is a part of trading, that it has nothing to do with your self-esteem. Give yourself permission to lose from time to time. Your ego must remain intact regardless of what is happening in your trading.

    Erecting appropriate fences between yourself and your trading maintains your ability to separate yourself from your trading business.

    There is more to you than your business. You are more than your trading. A proper fence informs you that the results of one trade are not to be confused with the results of all of your trading. Fences guide you as to the difference between the past, the present, and the future.

    Joe Ross
  2. nice post. i found that my biggest drawdown periods come from being right so many times in a row and i start to think that i'm invincible. then i get "stuck" in a losing position and add to it, thinking it has to turn. happened to me last month, was up 150k, lost it all in two days. :eek: :eek:

    sometimes it's good for me to have manageable losing days here and there to remind myself that i'm not perfect. kinda like sacrificing a lamb to the trading god.

  3. NKNY


    Great post Joe...

    Believe me, I have given my self permission to lose a lot more then just from time to time.. Being right means nothing if you lose more then you make when your wrong.

  4. jessop


    Excellent piece Joe.

    This is my big mental challenge ..... some days I control it, others not so well.

    When I started live trading I wanted it all so bad – the life of the independent pro trader. But its not really the money I’m after but the challenge of the markets and the enjoyment of being my own boss. But I also set myself unrealistic targets such as 5 contracts, 2 ER2 points per day in 6 months time etc

    I have a lot of self esteem riding on this being successful. So my trading fears are mainly about failing, not really about losing money on one trade.

    My 'areas for improvement' are hesitating on entry and not letting winners run. So its a comfort zone I have put in place to reduce my risk of failing. Having said all that there are days when I get in the groove and think about winning more than I do about protecting what I have.

    Thanks again
  5. I'll put that whole post in one line

    Trade with the trend :D
  6. Getting Rid Of Ego

    Become a trading zombie.

  7. I am not Joe's fan in this one.
    I love the feeling of being angry when I lose (sometimes).
    I love the feeling of being 'I am the greatest since Livermore' (sometimes).
    I don't want to get rid of ego.
    I don't want to do harakiri.
    (four sentences and seven "I"s !!!)
  8. One does get tired of seeing cliches posted endlessly, even if theyre true, but Joe has a business to run.
  9. • Trading without a predetermined loss exit point.
    • Trading without a predetermined objective point.
    • Not pulling the trigger on a trade, or hesitating before pulling the trigger.
    • Trading too large a size, or trading too often.
    • Marrying a trade, or marrying a market.
    • Adding to a losing trade.
    • Not taking profits when they are there on the table.

    All of these have nothing to do with ego,
    Has to do with your trading system.

    Do you feel arrogant and tell yourself "I'm feeling very proud of myself today so I am going to go into this trade without a a stop lost or profit point?"

    Of course not
  10. I kinda agree with you..but.....

    Since these are very meagre trading system fringe elements, what is the point of connecting them to a person (and an ego) who is not going to be making much money in the first place.

    Being a high money velocity trader, does involve being able to realize much of your potential. Ego is one of the human factors involved in this kind of focused making of money. There is never a real choice of either the ego or not the ego.

    Lets say Joe is a kind of person who has managed to use a set of suedo psychological means or ways of getting his ego out of his picture. No ego there any more. What are the consequences of no ego in his pictures.

    The "knowing how to know" is then greatly impaired. Like no more Jimny Cricket for critical thinking kinds of stuff that also has an emotional and moral aspect to it.

    It takes a lot to go through doubling your money velocity several times in succession. To get down and work hard where the rubber meets the road has a lot to do with "being on the ball and getting the job done" Ego is involved all the time and every step of the way.

    joe or anyone else disposing of the ego, intentionally or otherwise, is definitely headed down a dead end road. Not a good idea if a person is going through a learning experience to become a high mooney velocity ace.
    #10     Oct 10, 2005