I’m trying to be as clear as I can with my thinking process towards trading and investing. Making trading decisions is an extremely emotional process in practice, even though it’s viewed as an analytical or rational process.
– Greed: Desire for “absolute” wealth that doesn’t involve other people as a benchmark.
– Envy: Desire for “relative” wealth with respect to others.
Greed is good! More specifically, striving to be Greedy and avoiding Envy is GOOD, since it allows you to to practically function very well in modern society and keep a healthy psychology to make the correct decisions. Unfortunately, Envy is the much more powerful driver.
As with all things, it makes total sense from an evolutionary perspective. Unrestricted Greed would cause (proto-)humans to maximize some utility function without context, whereas Envy is a neat heuristic to just strive to be better than average. Envy is actually more useful for both the individual and the group.
What is the emotional and personal context that I’m making a trading decision? This may be more important than the actual trading tactic or overall strategy.
Trading Journal 