Did you know that ego can easily blow up your Forex Trading account? If you don't believe this, take a look at our small discussion - you will definitely change your mind.
17 November, GKFX – In the financial world, sometimes, emotions overtake. In fact, such emotions as fear and greed appear as major market movers, with fear certainly overriding greed. This is why markets usually drop faster than they rise.
What does it take to become a successful trader?
In order to become one, the person needs a correct mindset and psychology. However, this often appears as the key problem – many people struggle to develop these character features.
Yet, once we have got control of fear and greed, the adventures are not over. The next biggest challenge is to face our ego. We can define ego as a person’s sense of self-importance or self-esteem. In the financial world, this can be described as the desire to be right about the market trend.
It is vital to understand that all human beings have the ego. Making the correct trading decision can significantly elevate the self-esteem and further provide a sense of self-worth.
In fact, this was crucial in times of pure survival, since we had to be of value to stay in the game. Back then, our inclusion was closely connected with the ability to survive.
How Ego can blow up your Forex Trading account
Following on this, the ego has roots in our thinking and behaving processes. For the majority of us, it is a part of our essential makeup. This implies that we would need to take in into consideration as its almost impossible to fully get rid of it.
Having an ego is, in fact, not a big deal, unless we allow it to take over our trading decisions and strategies.
One of the most serious cases includes ego clashing with our trading execution. This happens when we allow our desire to make the right decision to overwhelm our own trading rules. In these occurrences, we can easily end up causing more risk than we initially counted for.
The ego-driven trader will certainly attach value to “being right” in a particular trade and start to move the stop-loss down. This kind of traders convinces themselves that they allow their trade to get more room to change direction and go the expected right way.
Yet, they eventually can wipe out a trading account quicker than they thought.
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