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cal and rational sense out of the market. The truth is that it is impossible to accurately and consistently predict what the market will do next. Yet this is exactly what the ego wants to do. The superior way to trade is to relax and allow the market to tell you if the bears or bulls are in charge. Your ego will fight, resisting the thought that it is best to relax and just let the market reveal itself. The ego wants, and demands, to be in charge. It is diametrically opposed to waiting for the market to unfold so that we may follow. The ego would prefer to anticipate what might happen instead of waiting for the event to take place. |
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Often the ego will prevent the conscious mind from believing what it is seeing, and will get us to believe what the ego thinks should be happening! This is why we will look at a chart of a commodity that we desperately clung to while it lost increasing amounts of money, before we were eventually forced out, and ask ourselves why we didn't see what was so obvious. Our ego is logically rationalizing the present on the basis of the past, and what it perceives the logical future to be. The ego has an awesome power to exclude from the conscious mind what is actually taking place! To prevent our ego from deluding our conscious mind, we must discipline the ego to focus only on the present moment. We always get what we focus on. By using discipline to force us to exist only in the present, without reflection upon the past or anticipation of the future, we will be able to accurately see what is transpiring around us. When we are disciplined to be only in the moment, we will be able to follow the market accordingly. |
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Once a trader starts to be profitable, the ego wants to accelerate the amount of profits obtained. So the trader will increase the number of contracts traded. Typically the trader who started to be profitable trading one or two contracts will scale up, and begin trading ten contracts. Before long the trader is losing a lot of money. The trader's ego has won the argument that there is no real difference between a one lot and a ten lot. The ego has rationalized away the concept that an incremental increase of one or two contracts might be better than jumping to ten. Everyone's ego is enhanced by sizebig house, big car, big bank account, and so on. The ego will always feel better as the size of what is being worked with or desired increases. The trader's ego will argue that the additional risk brought on by more contracts is minuscule and can be ignored. Always remember that the ego is very good at rationalizing and denying reality. Each time out, the ego believes that it is now truly in charge, and that the size of a position really can be increased dramatically without it affecting the trader's judgment. |
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The ego is extremely averse to pain. If it even slightly suspects that pain is around the corner, it will head in the opposite direction! The ego |
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