Gordon Gekko, the Wall Street character, convinced the audience that greed was good. But it didn’t lead to anything good. So is good greed in trading and will it not interfere with the trader – try to figure it out.
Is greed useful in trading?
The basis of many human actions is fear and greed. Therefore, greed in any of us is laid by nature. After all, what it is – the desire to receive material goods and benefits? It turns out that it is greed that leads many into trading. So maybe greed is good?
Christian saints consider greed as one of their deadly sins. After all, it multiplies the worries, leads to anger on competitors, the fear of losing the acquired, and contributes to loneliness.
Any emotions in trading – evil. And consequently greed, too, because it is an emotion in itself, and it also provokes anger, fear, and anxiety. With such a bunch of negative feelings, it’s not just difficult to trade – it’s impossible to live with them. Therefore, we will not agree with the words of a Hollywood character – greed in trading is not good.
Signs of a greedy trader
But if greed in a person is installed by default, then how to make it so that it does not interfere?
The first step to solving a problem is to realize that there is a problem. This will help such signs of a greedy trader:
- non-compliance with their own rules of trade;
- entry into the transaction without an explicit signal;
- all the time tormented by greed, the fear of missing profits;
- lack of tracking transactions, misunderstanding of the situation with open positions;
- rejection of stop loss and take profit;
- use of leverage;
- salary comes to the fore;
- anger from lost deals.
These are the most obvious signs of greed in trading. Each person is individual and the excitement of trade may manifest itself in different ways. But in any case, greed for good will not lead.
How to eliminate greed in trading?
If the trader has already realized that wallowing in greed means that it is time to correct this sin and take yourself in hand. The main way to overcome self-interest is a cold head. The sober calculation, without emotions, without feelings helps to achieve success and overcome greed. And to do this, you need to recall the abandoned documents:
- trading strategies;
- trader’s diary;
- trading plan.
This is where the path to cold-blooded trading, free from emotions.
By strictly following the set rules in terms of bidding, greed can be eliminated – after all, they are written in moments of calm when the brain does not obscure greed and the desire to earn.
Recording the results of the work in the diary will allow a sober assessment of how well the trader was balanced in the bidding process. Recording deviations from the plan will be a reminder that you cannot do this. So they will gradually disappear from practice.
Greed in trading is peculiar to everyone and it is difficult to do without it. Especially when the first successes appeared and the excitement just rolls over. Over time, this will pass, if not strongly succumb to these emotions. Those who are weak in spirit will come to the aid of the trader’s diary and trading plan.