Being a trader means to work in conditions of uncertainty, every single day. This means, that as a trader, you’re dealing with probabilities of success, and so inevitably, over time, you’ll be dealing with many losing trades. In this situation of constant uncertainty, how to maintain the confidence in your trading?
In this article we will explain 3 fundamental steps that you can follow to boost your confidence, that is so crucial to be successful in the markets.
1. Focus on the processes
No method has a 100% reliability in telling us if a given trade will be a winner or a loser. So, you shouldn’t obsess with the result of a given trade, but rather, you should think to yourself that you have followed the trading rules in each step of the trade. Professional market operators focus mainly on their trades, and not on their result. They know that if they operate correctly, on the long-term, the results will come. Paradoxically, when a trader focuses on the wins/losses that their trades might result in, he ends up losing money, as he has lost the focus on what it’s truly important. As Warren Buffett said, “Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard”.
This doesn’t mean of course, that you should ignore the risks in trading. Rather, the acknowledgment that you may end up losing a trade should always be present: by accepting that fact, you’ve already processed the negative emotion that is to lose money, and so, you won’t let the fear of losing guide you. When risking X money in a trade (that should be defined apriori), accept that it doesn’t belong to you anymore. If it ends up in a loss, well – that’s the cost of running a business.
2. Gain knowledge, and practice!
Top athletes get to the top of their game, by knowing the techniques in detail, and going through long hours of training. Due to an extensive preparation, they develop new skills and improve their technique, and along with it, boost their self-confidence.
Most times, these athletes don’t know their opponent’s strategy. However, with their preparation, they are able to master the fundamental techniques to anticipate, and thus, to react on time to any unexpected movement by the opponent.
Being a trader, the key to self-confidence is to prepare yourself for trading, with a trading system, and with practice. This way, you will eventually learn how to react in time to any setback, in any scenario that takes place in the markets.
3. Rely on your positive experiences
Successful people tend to have a positive and optimistic attitude: when you focus on the bright side, you have a tendency to attract more positive results. You only have to remember that if you have a tested trading system, and a risk management strategy, results will inevitably go your way.
One way of practicing this approach, is to focus on the aspects that have worked in your past trades – ask yourself: what did I do right? What was I afraid that was going to happen, but didn’t end up happening?
Approaching the markets with this mindset, will help reducing the fear of losing your money in trades, and to boost your self-confidence in trading to face the future positively, so that you can trade according to your trading strategy.