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Ego is classically defined as the conscious component of the psyche that experiences the outside world and reacts to it. In all cases the ego is a component of the trader's psyche that must be disciplined. Your ego is what creates your self-image. |
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Your ego is the part of your psyche that experiences and reacts to three demands: the demands of the outside world, unconscious desires and thoughts, and conscious thought. In many cases the conscious mind tends to act as a policeman toward the more hedonistic, impulsive unconscious mind, and our ego mediates between the two in line with the beliefs we have. As an individual you can never get rid of your ego in an absolute sense; however, you can master and control how effectively it mediates between rational and irrational thoughts. |
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In other words, when traders look at the market, they are perceiving the market action through "sunglasses" that color their perception. Traders create these "sunglasses" by their beliefs about themselves, their beliefs about the market, their thoughts about the meaning of everything they are experiencing, and their desires. In order to be consistently profitable, the trader must remove the sunglasses. |
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As a trader, your outside world consists of the market, which is uncontrollable. Your unconscious thoughts and desires are also uncontrollable, since they reside in your unconscious mind. However, your unconscious mind is totally unable to tell the difference between what has actually been experienced and what has been vividly imagined. Consequently your unconscious mind, though uncontrollable, can be powerfully influenced. This is an important concept to remember. The conscious mind gives you the ability to decideto think rationally and logically. In other words, your unconscious mind will often generate impulsive irrational thoughts that could lead to impulsive behavior unless they come under the control of the conscious rational mind. By using our conscious mind to become aware of the impulsive/irrational aspects of our unconscious mind, and controlling the thoughts we focus on, we will be able to control our behavior. |
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Most of us describe an egotistical person as someone who is arrogant, vain, or self-centered. This is because a person with an "inflated ego" is not able to correctly balance the three demands: the outside world, the unconscious mind, and the conscious mind. Consequently the egotist is a self-important jerk who believes that he or she is the center of the universe with little regard for the needs, desires, and wants of others. |
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Traders who "have an ego" are unable to perceive the market action correctly; consequently they consistently lose money. The reason their per- |
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