If I was a trading doctor, I would look for these 10 symptom in a trader before I diagnosed them as being greedy. Greedy trading can result in blindness to danger, dizziness for profits, and a loss of trading capital. Look for these ten warning signs :
- Greed causes the trader to only look at the best case scenario for profits, and ignore the worst case scenario.
- Greedy traders trade WAY to big a position size.
- A Greedy trader’s #1 priority is getting rich quick, while ignoring the risk of ruin.
- Traders that are greedy tend to believe they can have returns bigger than the best traders in the world right out of the gate.
- Greed makes traders set unrealistic expectations on each trade.
- Greedy traders tend to buy stocks that are down 50% believing they go back to where they were.
- Greed distorts a trader’s focus, so they only see the money, and not the homework involved in making the money.
- Traders take trades where the odds are heavily weighted against them, because they want to make huge returns on one trade. (Far out of the money options)
- Greedy traders trade with no plan and no method; they are just pursuing profits randomly.
- Greedy traders are always looking for the easy path to money, and not to the real path of hard work and experience that will lead to success.