Why are folks initially attracted to trading? For many, it’s the money, especially the prestige and status that money can bring. But seasoned traders warn that when money, riches, respect, or any other human needs enter the picture, failure is not far off. It’s common lore among those who have been in this business a long time that humility is associated with success, while pride, ego, and avarice lead to failure. Popular anecdotes recount stories of how a successful trader buys a big new house or luxury car and soon fails. The lesson: control your pride.

Pride can be a powerful motivator. We feel pride after making a significant achievement and are especially proud when the achievement has increased our social status. Trading is difficult. Few people master it, so when one is doing well, it’s natural to feel a sense of accomplishment and pride. But too much pride often leads to disaster. Pride can be a competitive emotion. Those who are especially proud have a burning desire to brag about their accomplishments and feel superior to others. This can go too far.

When people speak of their successes too often, others will resent them, and be waiting for them to fail. The overly proud trader is likely to feel strong social pressure to continue making large financial gains to save face. There’s also a risk of becoming stubbornly proud. Stubborn pride occurs when people have spent so much of their life feeling proud of their accomplishments, and trying to feel superior to others, that they have difficulty admitting when they have made mistakes. At an extreme, the overly proud become afraid to face mistakes and may even deny that they have faults.

Extreme pride can be a danger for trading and is the downfall for many. Trading is hard enough without introducing additional psychological pressures to feel superior to others, maintain social status, or save face. When pride drives trading decisions, one is likely to take unnecessary risks in order to make big wins to keep up appearances.

Controlling pride is vital. It is important to develop internal standards of self-worth. Don’t compete with other people. Learn to compete with yourself. Develop your own rules and standards related to your skill as a trader. When you reach your standard, you can feel a little pride, but don’t feel the need to tell others about it. If you can feel proud of your accomplishments, without feeling the need to brag about how well you have done or exaggerate how well you are doing, then you will have learned to feel a true sense of pride and self-worth.

Successful trading requires that one knows how to experience the proper amount of pride. When one achieves a goal, it’s useful to reward oneself for a job well done. But it’s vital to maintain an objective, non-emotional approach. Pride usually prevents one from cultivating this approach. The more you can keep your pride under control, the more successful you will be at making rational, unbiased decisions.

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