Greed is harmful to any Day Trader

Perhaps the word “greed” is not officially considered an onomatopoeia. Somehow though, to me, it definitely seems like one. And so, I deemed it just that! The sound of it is just so greedy, if you know what I mean. When I look at the word, the “e’s” seem to be a pair of green, greedy eyes narrowed into thin slits. Then, my artistic mind draws droplets hanging down from the “g” and “d”, so that I actually see greediness dripping down from the letters themselves. Taking into account the greedy look and sound of it, I am not fond of the word “greed” at all.

You may not share my sentiments on the word “greed” but, undoubtedly, you agree that the emotion itself is by far not a pretty one. On target, am I not? Greediness is not a trait one would feel proud to display (though, by virtue of its ugly nature, it has a tendency to flaunt itself…). Nevertheless, being that greediness is a human emotion, and considering the fact that we (well, a significant percentage of us at least!) fall under the category of “human beings”, we are all prone to having, can we call it “bouts”?, of greediness once in a while. Not commendable, but understandable! Still, it would do us well to keep our eyes open for signs of impending greed, to be wary of being ensnared in greed’s greedy clutches.


Especially when it comes to day trading. If you were under the impression that the only thing day traders need to focus their concentration on when trading, is following the rules and guidelines they were so carefully taught, you were right. And wrong! Right, because that is definitely a most vital point traders must adhere to. Wrong, because it is not the only detail involved in day trading that must warrant their full attention. Traders must also exercise extreme caution when taking positions in the market to ensure that their emotions don’t negatively impact a decision on their part. One of the emotions they need to be on guard of is, you got it!, greed.

How is it, you wonder, that greediness can have an effect on the actions of a day trader? You’re not ready to simply accept the above statements at face value; working on one’s emotions entails much effort and exertion, and you want a plausible response to this question before agreeing to sweat your brow off in an attempt to restrain any greediness from rising to the surface while you trade. Very good. That’s a sign of intelligence. Clever people ask questions - and make sure to get answers. So let’s expound.

He sits there at his desk, alert eyes darting back and forth between screens and charts, as he closely monitors market proceedings. I’m talking about the day trader, of course. A bit earlier, he had taken a position on a trade, one that he perceived to be very promising. His excitement mounts as he notes that it seems to be a positively winning trade. He continues to keep a watchful eye. Suddenly he sits up ramrod straight, then leans forward to inspect his screen. What was that he just saw? He noticed something, a clear indication that his “winning trade” might be headed now in the opposite direction. But he’s lost his ability to make smart, thought-out decisions at this point, for he has allowed his imminent success to blind him. In his quest to “make it big”, he fails to do what he ought: pull out of the trade immediately. Though logic whispers in his ear that his decision to hold out a little longer is a foolish one, his greediness overwhelms his logic’s power of persuasion. Though we all hope, for the good of the trader, that the end result won’t be too great a loss, unfortunately, that may very well be the case.

The degree of greediness depends on how the trader in question is faring financially. He may have the financial background that expects returns in a two hundred dollar range. If he were to enter a deal that can bring in a fifty dollar profit, he may be inclined to wait until it reaches closer to the expected two hundred dollars, despite the fact that if he does not grab the fifty dollars and “flee the market scene”, there’s a big possibility he’ll end up losing a lot of his capital.

Now I’m on to the next guy. He also sits there at his desk, carefully examining his computer screen to ensure he’s updated on every detail of the goings-on in the market. He’s more relaxed than the first trader, evidenced by the sunflower seeds he’s so carelessly cracking open while, almost simultaneously, tossing the shells into the plate on his desk that he prepared specifically for this purpose. This guy has a financial background that would expect him to rake in a smooth twenty thousand dollar profit from a single deal. He also sits up suddenly. He also saw something. Nah, forget about it! It was a potential deal, but all he would make on it would be a measly two hundred dollars. He doesn’t bother entering the deal. He grabs another fistful of sunflower seeds. Greed, guys. Get it?

Bottom line is that greed can get in the way of many important decisions in life. Here we explored its influence on day traders, of course, but we are all well aware that greediness is not prejudiced to them. It may take hard work on our part, but we want to rid ourselves of that greed so that we can make rational and intelligent decisions whenever necessary. Ready to join the battle?!