Greed: Not Good For Your Account

For those who belong to the “Greed Is Good” generation, this is sensitive topic indeed. Just imagine, being raised thinking that greed is the what moves people, countries and literally everything around you.

At some point, you have probably understood there was something wrong with that philosophy as you have met people entirely motivated by things can’t simply be bought with money.

Before moving forward with that idea, it is important we have a unified definition of greed: “A selfish and excessive desire for more of something (such as money) than is needed” (Source: Merriam-Webster).

The key word in this definition is “excessive”, because after all there is nothing wrong with desiring to have some money. Excessive is what drives people into crazy, bad decisions.

Balance is the ideal state of a trader. Why do you think yoga is so popular? Because it helps people to calm down, find balance between all what happens around. In trading, there are two sides that you should avoid: greed and fear. These places are toxic for your portfolio.

While greed pushes to act impulsively in search for higher returns, fear will keep you from taking potentially good opportunities to make money. In both cases, failure is just around the corner.

Instead, try practicing some critical thinking, defining clear and reachable goals that will serve as motivation, not as pressure. Giving yourself time to think and take decisions that last and will bring joy, that’s where you should put your money.

Fighting greed?

Yes, it is possible to overcome greed, but it is not easy. A good place to start is sitting down and breathing deeply, trying to understand what is wrong with your trading right now. What makes you feel out of place? Is it that you are opening too many positions? Risking excessively?

Maybe it’s time to follow a plan consistently, reducing the number of positions opened randomly and yes, working on your risk management skills.

And remember: never is too late for positive change.

Fort Financial Services