Feeling confident is important for anyone who wants to succeed at trading, but too much confidence will separate you from your wealth – quickly and relentlessly. The worst part: You will not realize it’s happening til it’s too late.
How much confidence is too much?
Of course, confidence is not a bad thing – not at all. As a trader, you should feel confident in your skills and strategy. Heck, in any profession you had better feel good about your knowledge and ability to succeed. Success builds confidence, and with that confidence you can achieve great things if you don’t tempt fate.
Here’s what separates the confident from the over-confident:
Learning from your failures.
Your trading failures are your most important lessons. As General Patton once said, “Success is how high you bounce when you hit bottom.” As a trader, it’s important to be able to bounce back, better than ever.
In my many years of trading, I have come across all types of personalities. It is the ones who are bold, aggressive and with no regard for risk who end up in the most trouble. Anybody can get lucky on a big bet once in a while. But a lucky streak is not skill set. If you believe it is, you’re doomed.
You will gain the right amount of confidence by being disciplined, practicing good risk management and constantly learning.
What to do about a big ego
After reading this, are you worried you have a big ego? Don’t worry, I can fix that for you. I’ve done it for others, many times over.
I’ve been there, as I’m sure many of you have, too. So when I come across someone with a big trading ego, I burst their bubble. I will break them down until that big ego is totally deflated. It is then – and only then – that a trader will find out how good they truly are.
If you’d like to read more about trading mistakes, check out our free ebook, Trading Stories from the Trenches.