Pride

“Pride of opinion has been responsible for the downfall of more men on Wall Street than any
other factor.”
Charles Dow

Pride of opinion is a characteristic of losing traders that have not been able to see their inner
selves; they do not know their own strengths and weaknesses. They do not understand
themselves and their emotions. Pride is simply stubbornness and the inability to admit a
mistake. Any trader who insists on holding a viewpoint in total contradiction to what is
actually going on around him for no other reason that he cannot admit he is wrong, will meet
the financial disaster. Price can be a direct reflection of the preceding emotions.

The market is all-powerful, it moves regardless of any man. You can do nothing to influence
where it is going and you cannot control its behaviour. When you compete in the market only
you can be wrong, and it can never be the other way around. Although the market is a harsh
environment and does not care about your welfare, it is not, as many losing traders think, out
to punish you.

Consider an analogy with the sea. A sailor cannot control the sea but he can control himself,
and in doing so he can earn a reward. A skilled mariner knows that the ocean needs to be
respected, but he does not fear it. He develops skills and discipline to help him benefit from
it. By using his acquired skills, no matter what the weather, the sailor is confident of getting
into port without harm, and earning his living. An ocean is like the markets, it can make a
man money or he can drown in it, the choice is there for each individual.

Just as mariners follow rules to navigate from A to B, so must a trader follow rules to keep
him from being sidetracked. The rules that I will outline are not new and they are not
original. They will, however, help you reach your goal of consistent profits. If you do not
have rules and guideline you will fall victim to outside influences and be influenced by your
emotions, your objectivity will be lost and so too will your money.