How do I get my ego out of my trading?

Discussion in 'Psychology' started by Joe Ross, May 12, 2005.

  1. "Hey Joe! How do I get my ego out of my trading? I want to be market-centred, but I find myself consistently being self-centred."
    - Trader -

    One thing I know for sure, your self concept has to be separate from the 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.

    I once wrote 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 or 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 exit 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?

    Here are some things you can do.

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

    1. 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.

    All the best in your trading,

    Joe Ross
  2. I think seperating yourself from trading is impossible, your ego(emotions) are your greatest weapon. You may be able to block your ego out for a period of time, but he will come back in the form of a huge catostrophic loss. I think it is better to know what taking losses feels like, learn to enjoy it, a small loss means you are that much closer to a big winner, and you are trading correctly. People that repress their feelings require years of therapy to fix it. (Ever seen the movie "The Cell?")

    Therefore my answer to the title is: Don't, put more of your ego into trading.
  3. I am a happy sadist, and I let my ego have its little fun in trading. The exact opposite of "be-egoless" is the NLP dictum "What can you do with a problem like that?"

    "You have to avoid feelings of guilt, persecution, and despair."? I say, INFLICT feelings of guilt, persecution, and despair!
  4. FredBloggs

    FredBloggs Guest

    excellent joe.

    this reminds me of transactional analysis developed in 60's ( before my time!)

    eric berne - the games people play.

    the catch phrase is...

    you R not who you I


    your Role in life shouldnt affect your personal Identity
  5. kubilai


    Maybe you should program yourself so that your ego is inflated by acting like a disciplined trader, not by being right, nor by monetary gain.

    You can be right today wrong tomorrow, make money today lose money tomorrow. But when you're a disciplined trader you are a disciplined trader, no one and no market can take that away from you. Add some edge and way you go?
  6. svrart


    My take:

    Emotion is caused when the mental model differs from reality and the person becomes aware of it and the difference collapses. eg. I thought I had no money in my pocket and suddently found some. So I am happy - a positive emotion. When I thought I had money and found there was none, I am sad or angry - a negative emotion. When the mental model and reality are the same there is no emotion. The sun will rise tomorrow - the thought and reality match very well so I wont feel any emotion tomorrow morning, even though I know for a fact that if the sun does not rise we will all be dead very soon. So even though there is reason to be happy, I am not becase there is no difference in model and reality. So a calm, unexcited state is the ideal, not by forcing oneself to be such, but by making the model match reality.

    How does it apply to the markets? When someone takes a position they either have a mental idea of what will happen or the system has a model (explicit or implicit). Now comes the problem - deceptions. This can be an ego deception eg. I am a super great trader. Because of this idea the trader ignores the market in subtle ways and sticks to his mental idea that he cannot lose money. Eventually the market proves him wrong. The bigger her deception, the bigger the loss. Another deception - marrying the position. It goes slightly against me. The sytem or discretion says get out. But I say - oh it will come back and it does a little. But then it collapses again - oh it will come back and it does a little. But then it collapses ...... All the while the pain is increasing. Then the pain crosses the critical point and the trade is purged. Here again, greater the deception greater the loss.

    When one takes on a position one has an expectation - system or discretion. This is not a problem. The problem is what happens afterwards - human weakness and being lured down a slippery slope. All the predefined stops, targets, risk rewards, indicators etc. are an attempt to address this problem. If one is highly evolved (I doubt any one is) it is not necessary, but being human we need crutches to make sure we dont delude ourselves down the path of ruin.

    Pesonally, one of the biggest rewards the market has given me is the realization that the vast majority of our thoughts are delusions.
  7. Svart. You are entirely too nice. The feelings of the people on the other side of your winning trades (you DO have winning trades, don't you, they feel like orgasms if you don't know) experience the full gamut of negative emotions. Those emotions are not delusions for them. Delusions don't HURT. I want the people I trade against to HURT. So it isn't just about the money. That's what the best trading books advise, don't think about the money. Mikey.
  8. as crazy as it seems ... I am paper trading now

    and even just looking at intraday chart patterns

    EOD .... and finding it very relaxing and easy to

    make money

  9. Paper TRADING
    Is Mastur BADING.

    Is why it feel so good.
  10. svrart


    Hi John,

    Perhaps there is a misunderstanding. Emotions are not delusions. They are very much real. In fact they are very important and tell one whether one is right or wrong. It is the REAL difference between one's mental image and reality that causes the emotion.
    #10     May 13, 2005