The work ethic does not apply.

The normal work ethic of time, effort and reward that is common in most job situations does

not apply in the markets.

For example, a factory worker putting in overtime and working

extra hours is rewarded with more money. As a general rule, the greater the effort we put in,

the greater the reward we expect. However, no such work ethic exists with the markets.A trader can spend years creating a trading system, only to see his equity wiped out in a matter of days. A trader, however, may quickly develop a simple system and reap huge profits.

Whether we acknowledge it or not, we normally believe that we deserve money under certain
conditions where we have to expend a certain amount of effort to get our reward. For
example, an investor sitting on a big profit feels he does not deserve it, and therefore tries to snatch it. 

When a trader loses, he feels that his input in terms of effort means he deserves a

reward and he holds his loss. His subconscious mind constantly equates time and effort with

reward, and this affects his objective judgment.

There is unlimited profit and loss potential. This is the one characteristic that brings out the
worst emotions in traders and causes them to lose. They simply cannot cope with the
unlimitedness of the markets’ movements. This “unlimitedness” and the massive leverage
available cause traders to create risk by their emotional desire to avoid it. This may sound
illogical until we examine how an investor’s emotions interact with his perception of risk
reward.