Ego and trading: what does yours cost you?

Ego costs money in specific ways: refusing to take a loss, needing to be right, revenge on the market, refusing to ask for help. The bill arrives in the account statement.

Ego and trading: what does yours cost you? — bid-ask spread diagram
The bid-ask spread on a currency pair

Where does ego bite you?

  • the ego-driven decision you keep making
  • how you catch it in real time
  • the humbling event that shrank it
Ego and trading: what does yours cost you? — risk-reward diagram
A risk-reward ratio of 1 to 2

The stop-loss guide is ego's natural enemy — it admits the possibility of being wrong.

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