Virtue is defined as the behavior of showing high moral standards.  Genevan philosopher Jean-Jacques Rousseau once said that “to live in virtue, we always have to fight with ourselves”.  He referred to this fight as a battle between the ego and the higher-self (conscious self).  When fully expressed, the higher-self is capable of shifting worlds.  It is here that the trader is able to tap into their intuition, executing with confidence in an uncertain market. 

In my previous article The Trading Plan, I discussed how the trader’s moral beliefs are highlighted in their trading plan and strategy.  I explained how it is ultimately up to the trader to stick to their plan, avoiding self-sabotage.  In order to avoid this pitfall the trader must shift from ego-based trading to ego-free trading.

The Shift

In trading technicals there is a shift we wait for. This shift is where price breaks an accumulation range.  From here price can begin its journey in a new direction or area of accumulation.  Here price is literally shifting.  The Virtuous Trader must make an inner shift as well.  This is a change from an emotionally driven trader into a purposeful trader.  How does one make this change?  The answer is self-actualization. 


Abraham Maslow defines self-actualization as “the desire for self-fulfillment, namely the tendency for the individual to become actualized in what he is potentially”. It is our ability to examine our inner-self and the desires that drive us.

Through self-actualization the trader can examine their actions and emotional responses objectively.  They can clearly see what behaviors they are repeating that are holding them back from their full expression. 

  • Are they moving their stop loss? 
  • Are they not taking profits when they should? 
  • Are they over leveraging or under leveraging after a loss? 

These trading demons can be addressed through the process of self-actualization, but first they must be able to separate from their ego.

Through self-actualization the trader can examine their actions and emotional responses objectively. 

The Ego Death

The ego is the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.  This sense of self is important for everyday life and interactions.  However, when you reside too much in the own ego it can hurt your performance.  Examples of this are:

  • Going from one strategy to another.
  • Hesitating to enter a trade.
  • Overtrading.
  • Placing expectations on the market.
  • Breaking your trading plan.

You are not in control of the market.  You must surrender to it, as it is it bigger than any single individual.  You can surrender to the market in your trading by tailoring your trading plan to align with your personality and lifestyle.  How does the Virtuous Trader surrender?

The Virtuous Trader is able to closely examine their emotional and physiological responses while in active trade(s) or when observing the market.

  • Are your hands sweating?  Is your heart racing?  Are you pacing around?
  • Does being in drawdown cause you to feel anxious or even pain?
  • Does closing your trade cause you to feel relief?

These are all emotional responses traders commonly go through.  These responses extend much further than the trading world.  We see them in all fields of mastery, across all crafts.  We see this often in professional sports, when scenarios arise where the ego is being challenged and an outcome is uncertain.  When faced with uncertainty, the ego begins to disassociate.  This can bring on unwarranted fear in the individual if not realized.   

Through self-actualization and the use of coping skills such as breath-work and meditation, the trader can break free of the ego while fully residing in the moment.  It is only then the trader will be able to reach their full-expression and become virtuous.

It is not enough to simply self-examine and suspend the ego.  In order to be deemed virtuous trader must approach their craft with a deep purpose.

To Be Continued…