Seven Virtues for Overcoming the Seven Deadly Sins of Trading

Most traders are familiar with the Seven Deadly Sins, which refer to a broad spectrum of cardinal vices that represent the very worst of human nature. However, far fewer know about the counter-balancing set of virtues they should adopt instead. Below we introduce traders to the Seven Deadly Sins and the holy virtues they should consider adopting if they hope to avoid falling into trading purgatory, or worst yet, trading hell!

Deadly Sin 1: Greed

In financial trading, greed is the easiest deadly sin to understand. In its most extreme form, greed is an intense selfish desire for wealth or power that clouds our judgement and pollutes our soul. In finance, greedy traders develop the worst habits and make all kinds of mistakes. This deadly sin has been solely responsible for many of the financial meltdowns that have pushed global economies into recession.

Holy Virtue 1: Generosity against Greed

The complete opposite of greed is generosity. In trading, generosity means rewarding yourself first through a solid risk management strategy that puts more money in your pocket over the long-term. When trading, think about incremental gains for maximum success.

Deadly Sin 2: Envy

Being jealous of other traders is a recipe for disaster because it detracts from your ability to focus on your own needs and abilities. At its worst, jealousy is a symptom of deeper insecurities that can impact your whole trading psychology.

Holy Virtue 2: Kindness against Envy

Developing kindness toward other people and the community at large is one of the best ways to counter the bitter emotion of envy. In the financial trading world, kindness is acknowledging that every trader has his or her own struggle they are trying to overcome. Usually, those at the pinnacle are the ones that have withstood the most trials and tribulations.

Deadly Sin 3: Gluttony

In finance, gluttony is akin to overtrading, which has many negative connotations. Traders who excessively buy and sell securities are usually much less cost-effective and goal-oriented than successful traders who only enter positions that meet their stringent trading criteria. Overtrading often leads traders down the path of speculation and herd mentality, which ultimately lead to ruin if relied on too much.

Holy Virtue 3: Temperance against Gluttony

Overtrading is a deep-seeded problem that can only be overcome by moderation and self-control. These character traits fall under the general umbrella of temperance, which allows traders considerable space to do what they love without falling into excess and defect. Regardless of your pursuit, finding the middle path is essential to your long-term success.

Deadly Sin 4: Sloth

Sloth is just a fancy way of describing a lazy trader who is unwilling to work for his or her goals. Obviously, it’s impossible to expect reward without the hard work and dedication needed to attain it. Sloth in the financial markets is especially dangerous because it can lead traders to consider get-rich-quick schemes and other silly programs that are designed to rob you of your time and money. The phrase, “There’s a sucker born every minute” usually applies to lazy traders who want a quick and easy way to make money.

Holy Virtue 4: Diligence against Sloth

Nothing gets past a diligent trader, who is persistent and hardworking in everything they do. Whereas the lazy trader waits for success to come to them (and they wait forever), the diligent trader finds success by being proactive. Diligence is an extremely important behavioural characteristic that separates success from failure.

Deadly Sin 5: Wrath

If you’ve ever sat next to a trader who just blew out their account on a bad trade or had momentum suddenly go against them without the appropriate stop-loss in play, then you’ll understand the meaning of wrath. Extreme anger and frustration are common in the financial markets and are the major sources of stress for both new and experienced traders. For some reason, traders seem to forget that managing emotional triggers that lead to anger is just as important when trading as it is in other areas of life.

Holy Virtue 5: Patience against Wrath

Patience is a virtue that all of us have been taught but very few of us actually apply. Being a successful trader requires a lot of patience. The decisions of picking a security to entering a position to eventually cashing out for profit must be carefully weighed each step of the way. Successful traders don’t make any of these decisions unless the technical and fundamental indicators align with their overall trading strategy. When money is on the line, now is not the time to be trigger happy. In this environment, only patience prevails.

Deadly Sin 6: Lust

Lust refers to any carnal desire that may bring about short-term pleasure with little to no regard for the future. In finance, the lust for wealth and power can knock a trader off course so fast that they’ll never know what hit them. That’s because your emotional and mental states are just as important for success as your ability to read and understand the markets.

Holy Virtue 6: Purity against Lust

Purity isn’t only a religious concept, but can refer to any intent to do good and avoid evil. Traders need to adopt a similar approach. They need to reflect on the reasons they are trading so that they can lead with good intentions. Wealth and power aren’t necessarily bad things. They merely need to be sought for the right reasons.

Deadly Sin 7: Pride

In finance, pride rears its ugly head in the form of overconfidence, which is surprisingly common among institutional investors and day-traders. The follies of overconfidence are many. Not only does it rob a trader of critical self-reflection, it often leads down the path of laziness and/or speculation. These are definitely not the cornerstones of a long-term trading strategy.

Holy Virtue 7: Humility against Pride

Most of the world’s wealthiest investors have one thing in common: they’re humble. In other words, they don’t let their success get to their head. People seem to forget that the most successful people are also the hardest working. Hard work and self-improvement require a sense of humility. At the end of the day, humble or not, the market will always find a way to knock you down a peg.

The post Seven Virtues for Overcoming the Seven Deadly Sins of Trading appeared first on Forex.Info.

Source:: Seven Virtues for Overcoming the Seven Deadly Sins of Trading