The Detrimental “E” that sabotages your trading

In this article by our trading psychologist, we are going to talk about the evil “E” words – Emotions, Expectations and Ego. These are one of the common fallacies of traders. Let’s have a deeper look at them.

The evil “E” word.

90% of traders I coach come to me asking how they can defeat it. Wrestling again and again with their trading, they come out of the fight with a bloody port and a lowered self-esteem.



Emotions in trading.

“How do I get rid of emotions?”

This is a tough question because nobody likes the answer.

The answer is you don’t.

Emotions are scientifically impossible to get rid of, but they can be regulated. (We’ll talk about that next time.)

What I really believe is the problem with a trader is not the emotions they feel, but another “E” word.



Expectations in their performance, expectations from the market, and expectations of how their life should pan out.

It is with this Expectation that another detrimental E word comes in.



With Ego and Expectations, a trader will defy what is clearly right before their very eyes to prove to protect their self-identity at the expense of their performance.

Emotions get a bad rap. Traders forget that emotions are what made them the strength of character they are. Emotions are what got them into trading.

It is emotions of hope that got them thinking about a better life. Emotions of courage that made them decide to take this path.

In fact, it is emotions too that nags them to keep their risk exposure in check for fear of overleveraging and getting a margin call.

Life, in general, has to have a healthy balance of each. Ego, Expectations, and Emotions.

In fact, a healthy ego will tell the trader that he can beat the odds and become one of the coveted profitable Trading Rockstars.


A healthy amount of expectation tells us the reward is worth it if we manage the risk. Or the kind of expectation that revolves around how we expect ourselves to do our best but anticipate bumps along the way.

A healthy amount of emotions give us data on what our intuition is telling us about trade and pulls us out of funk once again after a drawdown.

The expectation that traders MUST be emotionless set them up for failure because it’s an impossible objective to attain.

What we need is an acceptance of what can happen and to learn how to use the norm to our advantage.

After all, “Every battle is won before it is fought” and denying what can happen during the encounter is a surefire way to lose.

Instead of asking our traders to ignore their emotions, it is time that we teach them how to face it.