The most successful traders I know are also the most humble. Just my 2 cents
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Overconfidence
- Thread starter Joe Ross
- Start date
Quote from sell_the_news:
The most successful traders I know are also the most humble. Just my 2 cents
The most successful traders I know are supremely confident. Ultra-confident, even.
But do not confuse the emtions of cocky, bravado or arrogance (aka over-confidence) as they are all just social masks, manifestations of fear itself. In other words, all successful people are extremely confident in their ability. If they pretend to be anything otherwise, it too is just a social-mask projection.
Quote from Joe Ross:
I suppose I made that post at least in part because I have the problem of overconfidence. So in a way I was curious to see what anyone else would say. Nevertheless, I have had a few more thoughts about overconfidence, which I will post here now.
When I am overconfident, I falsely believe that I can trade beyond my skill set, which has decreased somewhat with age. I'm not nearly as quick as I use to be.
Overconfidence usually reflects an exaggerated view of a person's abilities, which can be fatal for trading, where accurate and realistic perceptions of a trader's skill level are crucial.
I know from my early years that I was especially overconfident when I felt uncertain about my abilities. When people feel inadequate, they often tell themselves that they are superior so as to bolster their feelings of incompetence. I know, because I did that.
It's hard to escape this dynamic process of "ego defense." Everyone feels inadequate every now and then, and thinking, "I'm doing great" can soothe unpleasant feelings of incompetence. It's probably not a good idea to do this very often, but doing so from time to time is relatively harmless, and it may even be a useful strategy when used sparingly.
The main thing that helped me get rid of overconfidence was realizing that the 800 pund gorilla was not me, but the market. The market can give you many humbling experiences. That's for sure.
Telling yourself that you are a smart and brilliant trader has its time and place. It's fun occasionally, but if you do it too often, you may never look at your trading skills objectively, and take the necessary steps to build the skills you need to become a successful trader. It is best to restrict such self-enhancing strategies to off hours rather than during the trading day.
It isn't useful to be overly optimistic and overconfident during the actual trading day, but during off hours, getting psyched up, and feeling a little omnipotent can be helpful. During off hours, it can be used as an effective motivator, especially when you encounter a transitory set of losing trades (ouch) and feel unrealistically disappointed about your current circumstances.
At these times, you may want to convince yourself that if you take specific action and trade a detailed trading plan, you can get yourself out of a minor rut, those times when if you just make a few more trades, things will turn around.
Overconfidence is a big problem, however, when you overtrade and do it impulsively. The overconfident trader may put on trades that just won't pan out. Over time, a great deal of money is lost, and it is hard to get out of the hole.
At these times, it is especially vital to take a brutal, honest look at your trading skills. You must gain an accurate assessment of your skills, identify your weaknesses, and build skills to compensate. Focus on performance rather than potential rewards to your ego and social status. Doing so will help you develop an accurate view of your skills and a realistic level of confidence. And if you have an accurate level of self-confidence, you will trade more profitably.
Comment to shark flu: I post here because although I may at times be overconfident in my trading, I do not feel I am superior to anyone. And if I can help a fellow trader to achieve success and profitability, then I will post here even if I get a lot crappy criticism for the posts I made. Foolish and snide comments roll off my back like water off a duck. They can never hurt me as much as I can hurt myself making stupid mistakes when trading.
As long as your giddiness does not overrule your risk profile, then be as confident as you want........
Education of a Speculator.
Commit this book to memory.
Quote from austinp:
The most successful traders I know are supremely confident. Ultra-confident, even.
But do not confuse the emtions of cocky, bravado or arrogance (aka over-confidence) as they are all just social masks, manifestations of fear itself. In other words, all successful people are extremely confident in their ability. If they pretend to be anything otherwise, it too is just a social-mask projection.
LIKE I SAID, JUST MY TWO CENTS...