One of the biggest forex mistakes you can make is letting your ego get involved in trading. While it is not seen as a major problem it is and causes the demise of most new traders. If you want to win, understand ego problems and how to combat them...
Ego normally comes into play when the following occurs.
1. A Trader Works Hard so he thinks he Deserves Success
In most areas of life, the harder you work the more money you are likely to make.
In forex trading working hard makes no difference to your success, you are judged simply on how accurate your trading signal is and that's it. A trader when he works hard and doesn't win, gets angry and upset and engages in revenge trading or lets his emotions get involved and that is the end of his account.
2. A Traders Believes He is Clever and Should Win
Another group of traders think because they are clever they will win and it dents their ego when they don't.
Clever people think being smart and complicated, will make them money and of course, simple methods work best as they are more robust. These traders can't take the blow to their ego that their knowledge doesn't help them and they are soon wiped out, or stop trading.
3. Inability to Take Losses
Perhaps the biggest problem of all is taking losses and believe me the market is going to give you plenty and you will sometimes face weeks of them, even the best traders do.
Today there is a huge amount of rubbish written you don't have to take long drawdown periods - well you do and you must take your losses and keep them small.
You are operating in an arena where only you can be wrong and the market is always right and it will make you look a fool - this is hard, as we all hate being wrong. Most traders however fail to keep loses small, let them run and the result is disaster, as leverage and running losses simply means equity wipe out.
Be Humble - Work Smart - Be Simple
Winning traders tend to be humble and leave their egos behind in trading.
They know that working hard doesn't guarantee success, so they work smart get the right forex education and keep things simple.
These people know it's the discipline to control their emotions and trading in a disciplined way that will lead them to success. In forex trading your ego will destroy you, so learn to humble and disciplined and you can win long term and enjoy currency trading success.
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