Getting StartedPsychology

Trading and Ego

Does your ego get in the way of your trading? After a couple of wins do you think you can’t fail and go on to lose all your days gains? Here we look at ego and how to control it when trading.

Imagine a stage populated by the main characters that comprise your inner "trading decision making committee". It’s a short odds bet that the loudest shout for leading man / woman will come from the ego. Brushing aside rationality and  requests for inclusion alike, the ego will pronounce his / her pre-eminence and sieze control.

Trading is a magnet for ego. It is full of promise and challenge and all egos relish a good scrap,especially when the odds are stacked against them and they have a sniff of heroism in the sweetened air. Statistics that regularly confirm that only 10-20% of traders are consistent net winners are music to the ego’s ears. No self respecting ego could countenance the prospect of being in the realm of the also ran, those poor, impoverished,less able 80-90%.

So, the battle commences and continues until the ego has been shown a yellow card and has to have some sobering time out. Receding into the unfamiliar shadows the ego usually brings with it an account balance fresh from a rendezvous with nemesis.

Learning to become a good, consistently successful trader requires what could be termed an "egodectemy". Clearly, the market, over time, has many opportunities to perform effective surgery. But, at first the patient is not usually receptive to his / her diagnosis. The market, as it does in its offhandedly impersonal way,steadily  tosses out a few more slings and arrows and eventually the ego runs for cover, though still, naturally,  on the defensive. A fugitive from self scrutiny, the ego, as befits the original usurper, skulks off in search of more accommodating terrain. 

Paradoxically, the ego enjoys its separateness yet cleaves towards an unspoken desire for belonging that cannot be expressed. It refutes team games unless it can be Captain and hijacks any endeavour where it can walk its strident talk. The ego’s myopic mini dramas condemn it to have ,at best, peripheral vision of what may be happening elsewhere, particularly the market, with predictably dire consequences. With the ego in the head trader’s seat the drive for action will be paramount ,for the ego both needs and loves being in the thick of the action, whatever the merits marketwise.

The ego has a voracious appetite and overtrading is its soulfood. Yum,Yum.

Let’s be under no illusions. The ego is a destructive force in our trading.  It manages to trip us up over and over again and is disposed to cause catastrophe given half a chance. The brothers and cousins of mistakes that Jesse Livermore talked about  were mainly  relatives in the ego family.

No question that on our trading skills balance sheet the ego is a permanent tenant in the liability column, the asset column being considerably overshadowed until it reaches for the light.

Where there’s a will though, there’s a way. The way of the consciously undertaken "egodectemy", self sought and administered. We call our asset column forward to shine the moment we call time on the ego’s proclaimed predominance. Slowly, through the mist the vision gets clearer ,there’s more space and we can advertise our "under new management" sign above our trading station.

The receding noise of the ego facilitates the growing presence of quieter qualities such as intuition. Intuition is perhaps the yin to the ego’s yang, the passive to the active. Unlike the ego which announces itself with such immediate urgency, intuition presents itself self effacingly.

It doesn’t require the ego’s fanfare. It carries no agenda, grinds no axes and seeks no reward or acknowledgement. If we can learn to encourage and empower our intuition it can become our greatest trading tool [assuming it is used in conjunction with self discipline]. As we learn to listen to ourselves our intuition " speaks " to us more. It brings a distilled experience to its open secrets. As we listen so our profitability increases.

So how does the ego accept pretenders to its throne such as intuition ?

It will  probably seek to spam intuition’s inbox and scatter its speculative spores in order to wrest back its fading grasp . Intuition is not exempt from egos predatory pulse. To the ego,all is fair game. So, aswell as the necessity to be vigilant in monitoring our trades we need to be vigilant for contaminations by the ego. Being of passive nature, intuition requires some degree of protection from attempted "coups".

Perhaps I stand accused of laying too many ills and grievances at the ego’s door but I’d rather be "guilty" of this than of watching my account get mullered due to a lack of discriminatory self awarenesss. For trading mastery, read 24/7 ego monitor. There’s no teabreaks ,quiet carefree moments of reverie, or laughter [apart from the gallows variety] as the ego’s auditor. It’s not a job for the faint of heart. The ego and its conspiratorial cohort, the saboteur, join forces as account assassins to best effect when concentration and discrimination are at a low ebb, like it or not.

The ego’s toolkit, though insidious and pervasive, can be neutered and rendered ineffective with patience, practice and persistence. It becomes easier with practiced awareness to spot those trades that are initiated by the ego, its trading ASBO’s become increasingly visible. For, the real deal is that the ego is not actually terribly bright. Confronting it and slowly stripping its stranglehold away can be a satisfying, enjoyable and increasingly profitable process.

Prioritising intuition allows for the gradual development of trust which in turn allows for intuitive insights to be made tangible as signals to act upon. Trusting ourselves and our signals and acting upon them with growing confidence supports the process of decision making. Perhaps some of these decisions may reflect a counter intuitive approach buy hey, let’s not get too ahead of ourselves here. Running before you can walk is one of the ego’s most cherished mantras.

Going against the needy impulses of the ego is usually very beneficial, whatever the financial outcome because it affirms that we are in charge and responsible. Of course, intuition is only one of the skills available to counter the ego’s threat and itself is not infallible ,in trading or elsewhere. But it can be our alert, our standby and our alarm, always on call for us if we give it space. Trading intuitively doesn’t preclude mistakes. Even in the heart of the zone the collective unconscious is probably not fully visible and if it was we’d probably be so blissed we’d close our trade . But intuition does give us an edge that is personal and can be developed further.

The art of the chart is in the heart aswell as the eye. Once we stop looking so hard we can start to see and then sometimes we can put a trade on and just close our eyes and trust. Working out an approach to the market from an intuitive perspective is not an exact science but if we can receive what the market gives us, process it and extract its kernels of wisdom then maybe we have a chance to thrive, a chance to meld our confections of desire into success.

Martin is an experienced, qualified facilitator/coach with a number of years full time trading experience.  His focus is on large cap, very liquid FTSE stocks, primarily using CFDs, though he has also traded both FTSE and S&P emini futures.Martin offers one to one and group coaching sessions and workshops that focus on the emotional dynamics of trading. You can contact Martin by visiting his website at

Martin is an experienced, qualified facilitator/coach with a number of years full time trading experience.  His focus is on large cap, very liquid ...


Established member
All struggling traders should take serious note of this article. Anyone deluded enough to believe that their ego is not a critical factor in their trading needs to reconsider !



Established member
The concluding paragraph sums it all! - " closing the eyes is often hard thing to do" easily said than done! - overall and excellent article


Senior member
The article appeals because it frames a classic trading problem in psychiatric terms. The downside is that there really is no prescription for solving the problem.

So is this just another vendor bait article?