What Does Personal Integrity Have To Do With Successful Trading?

2020-02-09 | John Carter

In the game of life, everything is in play: your time, your money, your relationships, your social position. Every element of your day-to-day existence is in your hands, and you protect each part of your life by investing wisely in each category. In fact, your quality of life is entirely determined by the way you handle those investments. You invest in your health by treating your body in a certain way and asking only reasonable things of it. You invest in your relationships by fostering them, treating them respectfully and with care. The way in which you invest in your life for a positive outcome can be boiled down to a single word: integrity.

Integrity is often thought of as doing what you say you’re going to do with other people. When you say you’ll be at a meeting, you show up at the appointed time. When you promise to take out the trash, you get it to the curb before the trash man cometh. Other people’s faith in you grows each and every time you keep your word. People who don’t keep their word aren’t treated seriously. If you have an opportunity for a new business venture and you need to find a partner, whom are you going to choose? Not someone who can’t even keep his or her word on the little things. Integrity is its own type of currency in the world. It’s how we show others that we deserve their respect, their love, and their compensation for our hard work.

The problem comes when we don’t treat ourselves with the same integrity. We do have a sense of self that we come to rely on when the chips are down. We have varying degrees of faith in ourselves in various situations, based on how we’ve handled those situations in the past. In trading, it’s critical that we’re able to trust ourselves to follow our plan, preserve our capital, and not freeze when the going suddenly gets very rough.

How do we build integrity with ourselves? Simple: we keep our word. If we write down that we’re going to go to the gym at 3:00 p.m., then come hell or high water, we get to the gym at 3:00 p.m. And if we tell ourselves, “Today I’m not eating any dessert,” then we stick to the plan, honor our word, and pass on the dessert. With each missed workout, with each slice of cheesecake, another shred of our integrity is lost. This chips away at our own sense of self, creating a growing sense of unreliability. What is the result? For traders, it’s being scared to take a trade because you don’t know if you can trust yourself to follow your plan once you’re in it. And not trusting yourself as a trader is a guaranteed route to disaster.

How do you build up this sense of self, this sense of trust in yourself? It’s very simple: keep your word with others and with yourself starting today. More important, learn to say no so that you don’t overcommit. But when you agree to do something, whether it’s meeting someone for a drink or going to the gym at a certain time, then fight like hell to make it happen. Be unreasonable if you need to. After all, you’re building up your most important trading tool — faith in yourself that you’ll follow your trading plan, which is keeping your word. There’s no one else there to hold you to it. You need to rely on yourself, and you need to believe with absolute conviction that you’re someone who can be counted on.

As traders, we’re confronted each moment with opportunities to violate our plans. Every new bar or candlestick is a change to let just one of our rules slip. Whether the outcome is a win or a loss, toying with your rules in the heat of the moment is more than merely a bad idea; it’s a message to yourself that you aren’t reliable and that you don’t play with integrity. Eventually, your integrity erodes to the point where you don’t even trust yourself. “Man, I hope I don’t screw this up again,” thinks Joe Trader.

Integrity in trading is the most critical component of your trading plan. Building up that integrity is easy to do. Start with the next trade. Follow your plan and follow your word, and your trading skills will increase.

2 thoughts on “What Does Personal Integrity Have To Do With Successful Trading?”

  1. A very timely word and very much appreciated. I follow you from a distance and am grateful for the tips you throw out there for little guys like me.

    Greg
    Memphis, Tn

  2. great words of wisdom, that have been forgotten by most of us. thanks JC

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