In order to become a professional trader, there are certain characteristics traits investing that you need to develop and have so that you can perform well under the pressures of the market. Pride is one of those traits that can be a bit tricky to handle. While it is mostly damaging, there are benefits associated with it as well.
So in this article we want to take a down to earth approach and discuss pride!
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What Is the Character of a Professional Investor/Trader?
Before we discuss pride in specific, we need to discuss the character and personality of a professional trader first. Is there a specific type of character that is more suited to become a trader or investor?
In essence, we can clearly see that the financial markets are diverse enough to be accommodating to all the different types of characters and personalities. Whether you have too much confidence, or you are a bit timid and conservative, there are choices for everyone.
But we can also see that there are traps associated with personality types and traits that investors should avoid. These negative traits include things such as fear, greed, FOMO, and yes, pride.
All of these negative personality traits can negatively impact the result of your investment. They can drive the investment process wayward in their own way.
For instance, fear can usually cause investors to pull out of their investment too early. This will undoubtedly cause lost opportunities. The opposite side of fear in this case would be patience. In many cases, an investment opportunity will take time to pay off. So if you are driven by fear you might miss the peak of your investment and never be able to reap on the maximum profits possible.
Similarly, greed can push you over the tip and cause the opposite of what we discussed. In any case, you can see that there is a pattern of destructive behavioral and characteristic features that can cause damage to the investment process.
Of course the focus of the present article is pride. We all know the meaning of the word pride and the fact that it means being too sure of yourself as a result of your hubris. But what is more important is the impact that pride can have on investing and trading.
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The Role of Pride in Investing and Trading
The word pride is sometimes associated with positive traits. For instance, we might take pride in our work, in our family, in our country, and things alike. But in this context pride has a negative connotation.
Because pride can sometimes mean being sure of yourself way more than you should be. This type of pride will give you a sense of invincibility. And this pride will have a different manifestation in whichever field you are active in.
So if you have too much pride as an investor or trader, it will make you believe that you cannot make any wrong decisions. You will feel that all your moves and decisions in the world of finance are correct.
But of course this is clearly a negative aspect of your personality. Because too much pride is clearly illogical. So in this way pride will put a veil over your decision making process and make you blind to the realities of the financial market in which you are investing or trading.
And keep in mind that the process of decision making with regard to your assets can be quite complex and challenging. There are sometimes decisions that you have to make that will either multiply your capital or make you lose all of them.
Now let’s see the positive and negative aspects of pride in investment.
Is Pride Damaging to the Investment Process?
While some people might consider pride to be a positive trait, it is, unfortunately, by and large a destructive and damaging impact in the process of investment.
The way pride can damage investment and trading is through the fact that it will give you a feeling of false confidence. The thing is that no one can predict the financial markets.
But being falsely and overconfident will make you believe that you indeed do know how the market is going to move. So you will make wrong decisions while being self-assured that you are right, when in fact you are wrong.
So in this way your decisions are no longer based on facts. You no longer see the real data in the market. Your decisions are based on your hubris and your inflated ego. You will no longer be able to see what is really happening in the market.
This is what we have witnessed many times in the crypto market and especially in the NFT market in the past couple of years. When the NFT market boomed and blew way out of proportion, it made some investors quick money.
This gave them too much pride for the position they had assumed. So this pride kept them pushing forward against all the warnings and signs that they should pull out. And indeed they suffered for that.
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Can Pride Be Positive in Investing and Trading?
The other side of the pride coin can be positive. But how?
Before we discuss the positive implications of pride, we need to mention that only a healthy level of pride will yield positive results. So there needs to be a balance and an optimum level of pride.
This optimum amount of pride will give you the courage and boost you need to push forward under tough conditions in the market when other investors would be too timid to continue.
So in this way, pride can take away your fear and help you take risky decisions that will pay off against all odds.
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Pride is one of those emotions and sentiments that can be quite damaging in the process of investing and cause you to fail in your important financial decisions. You need to be careful with this personality trait and not let it run out of control. Though there can also be a healthy level of pride that can give you confidence and boost to be bold in the market