Can someone please explain me what ego is? All my life I thought it is the (false) feeling of being special and better than others, which in turn makes you act differently...
And now I've read this: Ego - What Is the Ego
...and it seems to be the opposite: Quote: "The ego prevents us from acting on our basic urges (created by the id), but also works to achieve a balance with our moral and idealistic standards"
So, for example in Market Wizards many say you can't have an ego as a trader, what do they mean by that?
"Don't be a hero. Don't have an ego. Always question yourself and your ability. Don't ever feel that you are
very good. The second you do, you are dead."
"At other times in the past, investors lost a good profit by holding on too long, trying
to get a long-term capital gain. Some investors, even erroneously, convince themselves they can't sell
because of taxes—strong ego, weak judgment."
"When did you turn from a loser to a winner?
When I was able to separate my ego needs from making money. When I was able to accept being wrong.
Before, admitting I was wrong was more upsetting than losing the money."
"Most traders who fail have large egos and can't admit that they are wrong."
"Clearly, flexibility and suppression of ego are key elements of Gelber's success."
"Actually, the best traders have no ego. To be a great trader, you have to have a big enough ego only in the
sense that you have confidence in yourself."
Those two videos explain ego but I can't connect it with the ego in these quotes. What am I doing wrong? Does egotism has anything to do with ego? Was I right in my first post that the ego that is meant in these quotes is the one where one thinks he is better than others?
Or could someone give an example of a situation which is acted with and without ego? An example of the same trade taken by two traders one of whom has an ego and one without.
As I understood from the 1st video, I don't have the superego. I am free of moral rules. The reason I don't kill is more an investment choice. What's the point? What will it give me? Jail? Do I want it? I don't do stuff that does not make sense. Like going to clubs. What's the point to go there? Will it help me on my quest for world domination?^^ No, moving on...
Last edited by ReaM; May 11th, 2012 at 09:29 PM.
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A trader with a large ego thinks that he is right all the time, because he is convinced that his analysis is correct and therefore price must go up, if he thinks that price will go up. See that little film produced by @Big Mike.
That trader has a large ego and is sure that he is right, even after the market had ignored his analysis and moved into the opposite direction.
Markets a bipolar by design. At every moment the number of buyers equals the number of sellers. Therefore a trader who has not developed the habit of being right all the time, will be more successful to bow to the market and adapt to its changes.
Maybe these are the main differences between a beginning and a professional trader
-> the professional trader has an edge
-> the professional traders knows when he is wrong and needs to exit his position
The beginner has no edge and sticks to the position, even if it is hopeless, by false conviction (large ego) or because of loss aversion.
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As a trader: not to have ego, to me means, each day before you start to trade, the market is always right. It is going to do, what it is going to do and all we as traders can try and do, is read what the market is telling us, with out any preconceived concept.
We make a mistake if we project what we think it will do, what we want it to do or feel it will do from the past.
As a trader the best we can do, is try and think outside the box, where PA might go. and be flexible, to go in that direction etc.
They say Doctors and people who have been trained to always be right because human life is dependant upon their judgement, for this reason, they usually are not successful as a trader (if you are a doctor, please forgive me I do not mean any disrespect) because as a trader you can never always be right all you can do is know which set up has the highest probabilty for success.
If you have good risk to reward ratio, have developed some skills to reading the market, have good stops put in place and can live with not always having a profitable trade, you will be successful.
The markets humble us, we as a small individual compared to the majority of other people in the market, some being whales and big hedge funds, who can move and control the markets.
If you want to talk ego, I was getting a service of pit noise and it was helpful. He would let us know, when some big time traders would enter the pit and when he entered into a trade and the direction etc. One day the ES was falling dramatically, this big time trader entered the floor and started buying, buying, buying etc. He stopped the market from falling and as he did this, he raised his arms up the sky to gesture, he was holding the market up. Imagine the power he was feeling doing that!!! He had the funds to stop a falling ES.
Was that ego, I would say yes!
But he also had the funds and experience to be able to do that. We as small individuals, it is folly to think, we can do such things. Or to be so attached in the outcome of a trade, we can't let ourselves be stopped out, that is, I think part of having ego as a trader. Being stopped out, we may take a loss but it prevented us from being hurt further, if that stop wasn't in place. We can't always have profitable trades, all we can do is manage them properly to have small losses etc.
Ego can also stop you from being profitable as a trader. Maybe you only like to short because you think this economny is going to H____ and the market rallies for a month and the whole time you try shorting it when you should be buying the pullbacks. In this scenario, the stongly held belief system is affecting the traders ability to see what is really going on and costs either being stopped out, or only making a small profit and missing the big moves etc.
So, the more we can become egoless, flexible in our mind and not have a preconceived direction the market is going in, the better we will be as a trader.
Ego as a trader can also be, we think trading is like playing an electronic game: enter a trade without a set up or proper understanding of PA etc.
There are a lot of skills to develop as a trader and if we thought, we didn't need to learn stuff that would be having ego.
The best traders are always learning about the market and about themselves. I remember I was studying with one guy who was kind of uneducated, kind of proud of his southern down to roots mentality, he could be vulger and was proud of it. As a person he wasn't someone you would be impressed with. As I studied with him, he amazed me. He knew his set ups and did his trades mechanically. Sometimes he was right and sometimes he was wrong but when the market trended he was all over it very intensely. So, I would see how he would kick into high gear when the market trended; He would click his entry button like a rabbit, tttttttttt would go those entries. When he felt unsure of the market, he would cut down his contract size and be conservative.
Now I thought OK, this guy has got his trading down but then he kept growing, he continued to do his set up, but he went and learned options, which he felt were from the devil. Image that, something he was adverse too for years and he opened himself up to learning about them! He just kept learning about himself and his business of trading.
He also loved to trade GC, which he came up with a set up and he would tweak it to improve it etc.
I remember him saying, everytime he put on a trade, inside he was scared like a little girl.
Image a big grown man admitting that: that is a trader without ego, he is just being honest and honest with himself and observes himself and from there he grew and grew and grew. Last time I checked in, he was a multimillionaire and still expanding.
So, as a spiritual being in a physical body, we will always have an ego, it is all about how flexible you are, how humble you are and to grow and not be right all the time.
I consider trading to be one of the biggest teachers because we are always learning about what we did wrong and how to improve that and how we need to change and grow to accomplish our goals. If you can't do that, you won't be successful as a trader and the plus side, as a human being we expand and grow and I consider trading to be very spiritual because it sheds light on who we are and from there we become better traders and better people etc.
Wishing you the best,
Last edited by Rachel; May 12th, 2012 at 08:48 AM.
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Yes, that's always my theory too, market is going to do what it is going to do. If it goes 30 ticks against me, then I am not going to think, ok, it is still possible to win 10 ticks. The probability of it moving 40 ticks my way is way too small in some situations. If the experience tells me this thing is falling, then no reason to hold onto trade.
I am also scared as hell when I open the position. I don't have a problem admitting it, but I would if I were younger. What helps is actually standing up and trading standing in front of computer. Otherwise my actions can result in closing the position too early.
Thanks you everyone, I am sure I don't have ego. That's good news. I always get out when I am wrong. But I don't have trouble trading against the trend or averaging down, if I count it as a separate trade.
I start to believe, the reason this forum is so great, is because most of futures.io (formerly BMT) traders don't have an ego. Look at other forums, how much of the prediction, of what price is going to do of how great someone is stuff there is. You won't find on futures.io (formerly BMT) someone saying: "why the hell did you enter there? The price clearly was going to go up!"
Last edited by ReaM; May 12th, 2012 at 09:07 AM.
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