As traders achieve success and higher levels of profitability,
they become more at risk for failure. The problem? Their
egos get in the way of their success. Here’s how to stay the
Like a pilot, a police officer, or a
trapeze artist, a professional
trader knows he must follow the
rules just to stay alive. Usually,
this thought is enough to focus
the mind. But occasionally, the
realization is lost. Mistakes follow.
Losses mount. An otherwise
great trader succumbs. A
great trader goes bad.
How to avoid that tragic circumstance
was the subject of a
recent Futures Industry Association
(FIA) presentation in Chicago by professional trader and
trading coach Ray Kelly. “Large traders trade more zeroes than
small traders, but the process is the same,” he opined.
“The catalyst for destruction,” Kelly says, “is most often
ego.” Ego is the Ebola virus to the active trader. There is an
antidote, however: humility. At the onset of paralyzing ego,
humility must be administered at once, or results can be fatal.
It is even more effective if administered in advance, not
unlike a vaccine.
Can you or I become infected? Of course. What can be
done to protect against ego and its devastating effects?
Kelly suggests paying close attention to the following four
areas: self-knowledge, market knowledge, trading strategy,
and risk management. Answer the hard questions for yourself
before the market does it for you. Like meditation or exercise,
attention must be paid each day for maximum effectiveness.