How to deal with Overconfidence: The worst mistake you can make?

[Ghost of Cutten]

Quote from jinxu:

Has anyone here ever figure out how to strike a balance between overconfidence in trading and in your personal life?

My experience has been that overconfidence in trading lead to more risk taking and more mistakes. And paradoxically, my best trading has mostly came down to when I was feeling less confidence that lead to more focus. Like when you're down and your confidence is shaken but it gives you more focus because it makes you work harder.

However, the problem is for your personal life overconfidence is good. less confidence is bad. But want to have that overconfidence in my personal life without it spilling over to trading. For example: overconfidence is good with women. But bad with trading.

So how do I deal and find a balance?

Can anyone relate?

No, I can assure you that overconfidence in real life is just as bad. If you think you can build a bridge over the Atlantic for $5 million, and you try it and fall flat on your face, as of course you will, then your reputation will be in tatters and you will be sued into oblivion.

Of course, you can snow people for a while with the appearance of confidence. But then you can make a lot of money in trading by REALLY BELIEVING the bull market will never end. In both cases you do good for some time if you stay lucky, then you blow up.

You seem to be confusing overconfidence with motivation, or genuine ability. What you want is rationally-based confidence - where you act and sound like you really know what you are doing, and so people trust and follow you, because...shock horror...you actually *do* know what you are doing. And how do you get to that position? Hard work, study, paying your dues for a while, ability, persistence, planning, focus on goals etc. This isn't rocket science.

 

[jinxu]

Quote from Ghost of Cutten:

No, I can assure you that overconfidence in real life is just as bad. If you think you can build a bridge over the Atlantic for $5 million, and you try it and fall flat on your face, as of course you will, then your reputation will be in tatters and you will be sued into oblivion.

Of course, you can snow people for a while with the appearance of confidence. But then you can make a lot of money in trading by REALLY BELIEVING the bull market will never end. In both cases you do good for some time if you stay lucky, then you blow up.

You seem to be confusing overconfidence with motivation, or genuine ability. What you want is rationally-based confidence - where you act and sound like you really know what you are doing, and so people trust and follow you, because...shock horror...you actually *do* know what you are doing. And how do you get to that position? Hard work, study, paying your dues for a while, ability, persistence, planning, focus on goals etc. This isn't rocket science.

That's good advice that makes more sense. Thank you.

Another question. How do you handle the boredom that comes with successful trading?

 

[murray t turtle]

Quote from Ghost of Cutten:



Of course, you can snow people for a while with the appearance of confidence. But then you can make a lot of money in trading by REALLY BELIEVING the bull market will never end. In both cases you do good for some time if you stay lucky, then you blow up.

You seem to be confusing overconfidence with motivation, or genuine ability. What you want is rationally-based confidence - where you act and sound like you really know what you are doing, and so people trust and follow you, because...shock horror...you actually *do* know what you are doing. And how do you get to that position? Hard work, study, paying your dues for a while, ability, persistence, planning, focus on goals etc. This isn't rocket science.

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Handle boredom? You could be friends with a female drama queen LOL

Reading a good trading book [ + recording the co$t of an emotional/overconfident trade]or reading elitetrader may help wisely with boredom.