In today’s episode, we are going to be talking about something we feel strongly about and how overconfidence can really ruin your trading success.
This pattern occurs when you've been on a stretch of above-average performance and suddenly your mindset shifts out of alignment and causes greed.
If you've had multiple winning days or weeks at a time only to erase all of that progress in a single session, this is an episode meant for you!
At TRADEPRO Academy, we refer to this overconfidence in your trading ability as the "God complex".
It's called the God complex because you start to feel indestructible - it’s a point during a hot streak where you start to develop the belief that everything you touch turns to gold or said differently, you just can't seem to stop winning trades.
This is where the mindset of a trader shifts from confident to cocky - the trader bypasses the process mindset which has given them confidence in their performance and turns everything into a matter of trading based on feelings.
By this, we mean that a trader may start to loosen up on their trading process and begin to trade based on gut feelings and opinions on what they feel the market should do - not necessarily what the market is actually doing.
Overconfidence after a hot streak is a mental aspect that really exposes the human mind and ego for how easily it is affected by results =whether success or failure!
So how does the God complex start to manifest?
In our experience, many traders don’t get into the God complex until they actually realize the streak that they are on!
For example, Victorio shares a story of when this happened to him back in September 2019.
After realizing he was up 20 days in a row, the God complex kicked into his mindset and ended up costing him a couple of week's worth of gains within a handful of sessions.
If Victorio hadn’t come to that realization that he was doing really well, he would have continued to trade seamlessly throughout the rest of the month - in a state of flow - however, he ended up losing 25% of those gains in 5 days.
What is interesting is that the God complex is actually rooted in a lack mindset - it's not that you think you are above the market, rather, you are so used to everything you touch turning to profit that you've convinced yourself that taking losses is not part of your trading business. When you do take that first loser after a hot streak, it will trigger your lack mindset into wanting to "make my money back" as quickly as possible.
This is where it can get dangerous for you and your trading account especially if you are a relatively newer trader and going at it on your own.
If you have been on a winning streak over the last couple of days or weeks, it's important to know what the God complex is so that you can avoid it if possible -that is the best-case scenario!
Your second option is to accept it, make your mistakes, and fight back and your final option is to blow out your account and accept defeat (avoid this at all costs!!)
Here are a few tips on how you can work through the God complex or avoid it altogether:
In This Episode You Will Learn
