Ego and the Need to Be Right
You can explore the materials without registering, but with a free account you can track your progress and earn rewards along the way. By the end of your learning journey, you can have the knowledge you need to become a profitable Trader!
Join →Ego and the Need to Be Right
Trading does not reward us for being right about every market move. It rewards a process that manages uncertainty and risk over a sufficiently large sample of decisions.
How Ego Interferes
We may hold a losing position because closing it would feel like admitting a mistake. We may increase risk to prove that our analysis was correct, or interpret opposing information as a personal challenge rather than evidence that our hypothesis may be wrong.
The Professional Alternative
A trading hypothesis is a working assumption, not a statement of identity. When market evidence invalidates it, changing our position is a process decision, not a personal defeat.
Key Terms
Ego, need to be right, hypothesis, invalidation, risk control, process.
Knowledge Check
- Why is being right on every trade not the objective?
- How can ego affect a losing position?
- Why is changing a position after invalidation not a personal defeat?