EGO
YOU are the little guy!
How Much $ Is Traded Daily / Wikipedia
Now that doesn’t mean that little fish don’t live in the sea — they just have to know their place. If you can’t accept that, check your EGO.
Being a trader on Wall Street, you learn how the institutional Big Guys have a huge advantage.
You also get to learn how to take advantage of that too.
How to keep your EGO out of your trading?
Understand and accept that you are the little guy along for the ride.
One of the biggest mistakes that I see: people think they HAVE to be Right.
That is your EGO speaking.
Your EGO tells you that you are the Best. If you are placing a trade, that is a dangerous place to be. Your EGO will convince you that you are right and you end up staying in the trade through all the losses.
You hold onto a stock position because YOU ARE RIGHT.
You can hold onto this stock position for years, until it finally becomes a profitable trade and you exit the trade.
Your EGO tells you, “I knew you were right. Great Job!”
Do not let your EGO make you miss out on your profits.
I had a guy tell me that he had bought a stock at $12/share ($6k/500shares)
He went on to say that he was ready to Sell at $16.50.
This was a random exit — he was just going to be happy with the profit.
He put his Sell Limit order in for $16.50
And within a few short weeks, the stock rose to $16.40.
It never made it to his price of $16.50
but went on to make a sharp U-turn
Rather than getting out of the trade at a profit,
He continued to hold it.
His EGO was going to be Right.
He held on until it had gotten to a low of $8 —
Over 50% down from its High —
A 30% loss of his initial investment
He continued to hold.
For Three more YEARS.
It had done quite well.
It had reached $50+
He Finally Sold at a Random price again
For a total of $24k+ — profit of $18k+
He was “Right” & he was Happy!
His EGO took over and won.
He went on to say,
“I knew it was going to be a good one.”
Here is the problem:
His $6000 (500 shares) investment had turned into $8000+ in just a couple of weeks and HE DID NOT TAKE THE PROFIT.
He was going to be “RIGHT”; he was determined that it would reach $16.50 (because HE decided that was a good number).
If he would have sold at $16.00-16.40, he could have locked in good profit ($2k+ or ~30%).
He could have continued watching the chart and eventually bought back in at ~$8.00 and bought more shares with the same $6k (750 shares) + $2k profit (165 shares).
And again, he could have sold at $50. Not the correct exit spot but for this example we will keep the same numbers
The difference in letting your EGO be right is Crazy!
His total sale would have been $46,000, compared to his $24k
This is the same exact time frame, same exact stock!
$46,000 minus the initial $6k = $40,000
OR by being “Right”: $24k-$6k = $18,000
DO NOT let your EGO convince you that YOU have to be right.
Entry Point
As you can see, your entry point is not as important as your exit point.
If you get in, just know that you can get out.
You don’t have to prove that you were right — even if you wait for years to do it. (You lose out on so much profit in the interim.)
So as an investor or trader, get in, but be prepared to get out.
Leave your EGO behind and increase your profits exponentially
By getting out of your trade when it is not going your way.
Trailing Stop
How to lock in a profit and not let your EGO dictate when you should get out.
To take the thinking out of whether you should Sell or Not…
Put a “Trailing Stop Market” order in.
You have now guaranteed yourself a profit on your trade.
You have beaten your EGO.
Conclusion
You can easily multiply your profits on a massive scale IF you leave your EGO out of the equation.
You can make profits regularly IF you get in with a trailing stop to protect those profits.
Manage your money.
Your entry point does NOT have to be perfect or even close.
Have you ever let your EGO get the best of you?
Share your “Best” story and what you learned in the comments.
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