The "observing ego"

[Value trader]

The "observing ego"


Hi traders!

In trading, we have to deal with uncertainty, conflicting information, misleading signals and other frustrating things. It’s no surprise that we often lack discipline - we don’t know what to rely on. Mindset of a trader, when you are ok with the fact of losing ground under your boots from time to time, is hard to develop. Probably, trading is the most frustrating occupation of all existing occupations. Of course, professional traders keep this frustration on low level – but nevertheless there will be too many situations when your best laid plans go wrong.

I won’t be mistaken if say that ability to deal with frustration/regret is one the most important psychological abilities of professional trader.

There are situations when frustration becomes so strong, that it crosses emotional pain threshold of a trader and he starts sending orders to his trading terminal just to avoid this unbearable feeling.
Small (controllable) portion of frustration can be useful though like small portions of poison can be useful for our body. If we are frustrated, we will concentrate, try to avoid destructive actions next time, we will note – what market conditions leaded to our loss e t.c.

So, every emotion can have either destructive or positive effect on our trading. Emotion can be better compared with energy for action – it focuses our attention, drives our behavior. But when it starts dominating in our mind, it starts to control our mind – in this case we are no longer are acting in our best interest.

How to take back this control to ourselves? When we are most disciplined?

We are most disciplined when we are not indentified with our emotions, when we operate from the «meta position», psychologists call it «observing ego». It can be best compared with peaceful place inside our mind - the more we are rooted in this place, the more we are capable to control our mind and actions.

There are basically two ways in psychology to increase our ability to operate from «observing ego» - one is psychotherapy when person should dig deep and find reasons for his primary trauma that leads to increased emotional threshold in some situations. If primary reason is understood and trauma is cured, emotional threshold of a person can increase and self-control will not be a problem. Drawback of this method is that we have to visit a therapist and it can take much time – up to several years.
The second approach is called «cognitive psychology» and it helps person to «switch on» the observing ego by conscious effort.

Method that cognitive psychologists offer to their clients is to take notebook and immediately write down all your thoughts and feelings that run through your head when you are upset and frustrated. After you have written it down, you can speak it out loud – it helps to reduce emotional pressure. Trick in this method is that when we start writing, we are no longer identifying with the person who experiences emotions, we start observing them instead. We are not «traders» at the moment we are writing – we are rather «coaches» or «writers». That’s exactly what we need – this practice helps us fix our mind in «observing ego» and increase its presence in tough situations – next time you will notice that you will be better prepared for the same situation.

Good luck!

[newentry]

ego or selfish, this is the habit or daily habit which we bring before enter the business and then become a problem for us, and also it will always trigger the emotion then we are trapped at bad situation and if we can not control it, and as you said above, there are two side at emotion who will give us positive and negative, i do agree, one side will push us to learn and practice and it is like an intention and desire to get success and one of them will lead us to face some loses or big problem and if we can not control it,
then i guess as my opinion, at this business, we need to walk straight, no target as the biggest burden who will trigger the emotion, no assessment, it is useful for us to do not sink at some situation , for winning or losing,

[raihan tutul]

ego is the main problem in forex. forex will be easy for you if you trying hard for your best and i think only you can earn profit from here and always we should observing ego. because it is a great problem for us

[ara]

then i guess as my opinion, at this business, we need to walk straight, no target as the biggest burden who will trigger the emotion, no assessment, it is useful for us to do not sink at some situation , for winning or losing,

Target always gives us the benefits and risks, if we rate from the positive side, targets is good in giving the motivation for us in the forex trading, but if we rate from the negative side, targets is always been pressure for us to achieve profits in a certain amount as targets so we could do a trade even in unfavorable market conditions. So the solution of this problem is that we should have a target in forex trading, but we do not have to always reach the target. This is just my understanding ...

[Bulls Eye]

Probably, trading is the most frustrating occupation of all existing occupations.

If you think so then I must have to say that you have never found the real test, the real excitement of Forex market. I used to think that Forex is one of the most exciting occupations out there. Forex is kinda unknown market place where you don't know actually what is going to happen. And this makes the thrill, the excitement lively. We just have to have a good money management and rest is the enjoyment this thrill.

[aris90]

How to take back this control to ourselves? When we are most disciplined?

Discipline is a character. It comes from the regular activity since we were a baby. To me discipline is the most interesting matter on trading. Discipline is the key that trader must obey to become successful, till now I can not be discipline. I make my schedule but I always break it. I do not know how to start to be discipline.

[layigold]

Ego plays out in trading when a trader refuses to accept he is wrong when the market has proven him wrong or better still, when he his reacting to market as a result of loss. We must berry our ego if we want to be very successful in our trading endeavors. We must learn to accept loss when it comes and avoid unnecessary reaction to the market.

[dkarev]

we need to always track check our-self from time to time when trading,though this business is not always easy and the market condition as well can lead to over trading or ego trading,we just need to be careful and the most important thing when trading is to be sure we are on the right trend of the market,even if the market is acting against us we can always be rest assured it will resume in a matter time and patient.

[nidhi]

It is very easy to predict about controlling of ego and emotions but very difficult to control at times, and even we forget all basics when the contingency arrives, the control over ego comes with experience what I personally feel and more a trader is experienced the lesser will be the reaction on adverse conditions but at initial stage it requires a lot of self control and self discipline.

[lawners1791]

yes i believe the use with the notice of the return with the past work should helps to earn better with the further entries with the return with the evaluation and the good improvesment to converge the decision on using such distinct system and strategics with the real plan.