WHY A WEAK EGO HAS NO PLACE IN FOREX TRADING
Why A Weak Ego Has No Place In Forex Trading
While every trader will develop their own unique personal style of trading over the years, there are a couple of golden rules and a few universal truths that will always apply, no matter who you are and how long you’ve been trading.
Getting to grips with these early on will really stand you in excellent stead if you have plans in mind to make a lucrative career out of forex trading.
The most important of these rules is something that we blog a lot about – and with good reason. If you fail to prioritise it, then you’ll never reach the upper stratospheres of trading success.
We’re talking, of course, about emotion. More specifically, the importance of keeping your emotions in check, both good and bad.
Being a good trader is about being self-aware and being honest with yourself about your best and worst qualities, your strengths and your weaknesses.
Arming yourself with this knowledge will help you focus your attention where it’s needed so you can build resilience and become a better trader, more capable of reacting in positive ways that will only benefit you on the trading floor.
Turn the lens inward and think critically about your emotional responses to both positive and negative stimuli. Are you levelheaded? Can you remain objective and rational? Or do you find yourself panicking, stressed out and anxious in the face of failure? Are you self-congratulatory and peacocking when on a winning streak?
Uncontrollable emotional responses to trading events and outcomes will ultimately spell your end as a trader. Initial emotions are to be expected while trading (as they are in life) but if you let these overwhelm you, your performance will be affected and you’ll find yourself facing losses with increasing regularity.
Something to be particularly mindful of is the concept of the ego. In psychoanalytic theory, the ego is the part of our personality that we experience as the “I” or the self, giving us consistency of behaviour and continuity throughout our lives by giving us a way to relate to past events with our actions now and in the future.
The ego can change as the years go on and it can be influenced by all sorts of factors, so even if you have a strong ego right now, one that’s working hard for you and keeping you on the straight and narrow, you could easily develop a weaker ego later down the line. So be on your guard for that, as it could affect your trading abilities if you don’t pay due care and attention.
What is a strong ego?
Ego strength is a concept that traders might find particularly interesting if they’re keen to improve and grow their career as they’d like.
A strong ego is one that serves you well, characterised by the ability to view both the external world and the inner self objectively, the ability to follow personal resolutions through to completion and the ability to choose decisively when presented with different alternatives.
Wondering if you have well developed ego strength? Ask yourself if you’re optimistic, resilient and are highly capable of handling challenges when they come your way.
If you adopt a learning approach to life, are able to tolerate discomfort, can regulate your emotions and look at life with a curious mind, one that embraces the idea of change, you’re in an excellent position… and you should see this outlook and state of mind reflected in your trading performance.
The better your ego strength is, the more likely it is that you’ll be comfortable in taking control of your problems and finding workable solutions, looking at the bigger picture and seeing what can and can’t be changed – and how best to react to this in a practical and proactive way.
What is a weak ego?
In contrast, a weak ego will actively work against you, characterised by a lack of resiliency and a yearning for what feels comfortable… whatever that may be. If something doesn’t feel comfortable, a weak ego will do all it can to steer well clear, which means that progress will be hampered and your growth as a trader (and a human being) will falter.
An individual with a weak ego will typically have unrealistic expectations about outcomes, expectations that are firmly rooted in their psyche by core beliefs that are rooted in anxiety and fear.
This means that they’re likely to be stuck in damaging thought patterns that have the potential to make them think they don’t have the resilience or resources to handle situations that crop up.
It can be very difficult to break these patterns and a weak ego can make other paths seem impossible, which gets in the way of developing ego strength and leaves us stuck in a repetitive loop of problematic behaviour, such as impulsiveness.
Think back and be as honest as you can with yourself about how you reacted during recent trades. Did you rely on defence mechanisms like denial or losing your temper?
Were you able to accept what happened and move on quickly, or did you find yourself lost in a maelstrom of emotion, unable to process your feelings sufficiently to give you the freedom to move on and focus on future trading opportunities?
Being able to identify where you’re stuck and what you need to do to help yourself will be key as a trader, so now’s the time for (potentially) brutal honesty. What vulnerable areas will you find to work on?
How to improve ego strength
The most successful traders out there know that in order to win big and win big consistently they need to be motivated and dedicated to the fine art of forex. It’s not something that can be dabbled in if the ultimate goal is to be a professional trader. You have to give it your all, or you’ll flounder sooner rather than later.
The same is true for building up ego strength… it takes time, effort and a lot of dedication, so be prepared to put the hours in. The good news, however, is that you’ll start to reap the rewards relatively quickly and this is sure to spur you on, as you see how it translates to trading success.
Developing insight and self-awareness will be key to amassing ego strength and a good place to begin is with journaling. This is something that we advocate strongly for and all the top traders out there will track their progress as they go, making it easier to identify vulnerable areas within yourself so you can grow and evolve.
Taking yourself out of your comfort zone deliberately and exposing yourself to new experiences and ideas, trying out new strategies and ways of working, can also help build up ego strength.
You need to start challenging yourself and your own thoughts and beliefs, about yourself and about the outside world, if you’re to rid yourself of your weak ego and forge ahead with your trading plans.
Once you’ve done some ego work, you’ll find that you’ll become increasingly competent at deciding how you feel and what you think, as well as how you want to respond, instead of relying on your ego to do all the hard work for you.
When a weak ego is in charge, you’ll quickly be led astray but the more you regain control, the more work on your inner self you’ll actually want to do.
Alongside your journaling, what about practising saying positive affirmations to yourself? It can be incredibly beneficial to repeat certain phrases and statements to yourself over and over again, helping you to reconnect with your inner self, build resilience and feel stronger overall.
Try out statements like “I can do anything I put my mind to”, “I am the master of my own destiny”, “I am stronger than my fears”, “I believe in myself”, “it’s OK to step outside my comfort zone”… and so on.
The more you say these phrases to yourself, the more they’ll be absorbed into your psyche and the easier it will be to enact the practical steps required in order to achieve what you want. Fake it till you make it, in a sense!
Affirmations have long been a go-to for many a successful trader over the years and it could be a good place to begin if you’ve been feeling a little stuck in a rut with your trading performance of late. So why not give it a go today and see what difference it could make?
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