The vast majority of traders have a little voice that arises at times caused by greed and the ego I call “The Inner Trading Demon”. It can feel at times like this “Demon” takes us over and makes us do ridiculous things, especially when we are new to seeing hundreds of dollars come and go through our accounts quickly. The “Demon” does not care as much about making money as it does proving its self worth through trading. It does not want to be wrong, and when money is lost it wants to immediately make it back to prove that it can.
While in a losing position the “Demon” does not want to get out and admit defeat, it wants to make up a story of why the position is going against us, it wants to hold on and hope it turns around. When the loss is finally taken the Demon will defend your ego by blaming High Frequency Traders, the market, stupid traders and of course the legendary “THEM” that manipulate the markets.
While you can write a great trading plan while the market is closed the “Demon” does not want to follow it after the opening bell. It wants to trade bigger than planned, it wants to take more entries than planned, and let losses run and hope they come back instead of taking them. It likes to bank small profits but does not want to close big losses. The “Demon” is all about protecting your ego by damaging your trading account.
A trader’s success will mainly be determined by defeating this “Inner Trading Demon” by making the voice of your “Inner Rich Trader” louder than it is. Your “Rich Trader” voice wants to make money, that is all, and is ready to follow a plan that leads to profits in the end.
