Greed. Envy. Gluttony. Sloth. Wrath. Lust. Pride… the seven deadly sins. According to ethics, these are the transgressions standing in the way of spiritual progress and purity. In reality though the seven deadly sins represent the dangers of both excess and defect which in modern times can be applied to virtually every aspect of life.
These cardinal vices often play out in the financial markets, leading traders to spiritual ruin or even bankruptcy. For this reason, it’s important to understand how these sins impact our trading behavior. It’s even more critical to identify the root causes of these transgressions so that we can replace them with virtues.
In this series, we take a look at the seven deadly sins of financial trading and how you can overcome them to improve your trading mindset.
Envy is another deadly sin that has a way of getting us to act irrationally and in the modern age of social media it is spreading like a disease. The trader who just bought a new Porche, the investor who’s posting Facebook photos from a luxury penthouse in New York. It can be upsetting can’t it?
Envious traders often become greedy traders because they are desperately trying to overcome their insecurities by getting rich in the financial market. That’s why it’s so necessary to separate the financial markets from the rest of your life. It’s equally as important to develop healthy motivations for entering the market in the first place.
But it’s not enough to block out your personal life from the equation. After all, the financial markets are filled with the super-rich who can make you feel pretty insignificant. Rather than be jealous of them, try to use these traders as a source of motivation to better yourself and transform a negative emotion into a positive one. It’s also important to realize that self-worth and kindness are on the flip side of the envy coin.
It’s also important to note that there are a lot of self-important financial “gurus” in the market today flashing around expensive cars and airbrushing Instagram photos of their millionaire lifestyles. Many of these self-styled experts are really just scammers who aren’t nearly as successful as they portray themselves to be. The next time you want to take advice from these people ask yourself the last time you saw Warren Buffett flash around his tens of billions of dollars on Instagram? As it just so happens, successful traders (and successful people in general) are very humble about their achievements and serious in their approach.
One of the best ways to counteract envy is to count your own blessings and this technique also helps to establish a track record of profitable trades. The more trades you successfully execute, the less relevant other people will become to your sense of self-worth and accomplishment. In other words, define what success means for you and start working toward it… it’s a cliché but you are only really in competition with yourself.
To overcome envy, it’s important to ground your expectations in reality and understand that becoming successful in the financial markets requires time, patience and a lot of practice. So rather than waste your energy on wanting what others have, focus each and every day on learning more about the markets and improving your overall strategy. Better yet, identify a list of tangible goals and work each day on achieving them. In other words, get those Instagram braggers out of your head once and for all. This is the only proven strategy for overcoming the disease of jealousy.
In short, don’t compare yourself to others! Instead, compare the success of your trading portfolio to the market average. To maintain your motivation, focus first on improving your past performance record. Are you performing better or worse? Why or why not? These questions will be much more conducive to your long term success than aspiring to join the Lamborghini club.
- Don’t believe every financial bragger
- Keep a record of your successes
- Create a list of realistic goals
Source Sam Bourgi- Financial Markets Writer