“They don’t avoid doing the scary thing”
Highly confident traders don’t take the easy road.
They know that the things that are scary to do, are often what’s needed to succeed as a trader. For example…
When a trade is going your way, the easy thing to do is to get out of the trade for a measly premature profit.
The scary thing to do, is to hold onto the trade until it hits your take profit level, knowing that it could turn around and hit your stop loss.
Unfortunately, you need to do the latter. This way you’ll not only follow your trading strategy but you’ll also bank a bigger profit which is what you need to achieve for your portfolio.
Don’t bank a small profit just because you’re afraid of the trade turning against you. Small losses are all part of the trading game. It’s the big profits that will drive your portfolio higher.
Put in your trading levels (entry, stop loss and take profit) and simply leave your trade alone.
“They don’t live in a bubble of comfort”
Taking a loss is probably one of the hardest things you can do as a trader. You simply don’t want to be wrong. New traders decide to not follow their own stop loss rules when they trade.
When a market is going against them they tend to drop the stop loss further down to avoid that uncomfortable feeling of taking a loss. They hold onto the losing trade which increases their losses to come.
This gives them some form of comfort knowing they aren’t wrong yet as they’re still holding onto their trade.
When you hold onto a loser, you feel like you still have hope and comfort with the trade. You believe the market will turn up where you’ll ‘eventually’ bank a decent profit.
The problem is if the market keeps dropping, that bubble of comfort is going to turn into a very painful experience when you take that knock. So make sure you cut your small loss and move onto the next one.
“They don’t obsess over the opinions of others”
When you have a proven trading strategy, with a set amount of rules, everything else doesn’t matter.
Don’t worry about what Bloomberg, your friends or news articles are saying about local or international markets. These external opinions have nothing to do with the performance of your trading strategy.
If it did, then you would have included them into the rules.
So instead, follow your strategy as it is and forget the rest. You’ll feel more confident as a trader when you depend on less irrelevant resources.
“They don’t need constant reassurance”
Confident people aren’t in need of hand holding.
You don’t need to ask anyone their opinion on what they think about your current trading positions.
Remember, when you have a trading strategy with proven results – YOU KNOW BETTER.
“They don’t quit because of minor set-backs”
When incurring losses after a losing streak, confident traders keep at it.
They don’t throw away their strategy, break their keyboard and run back to the dusty drawing board.
No! A confident trader will first lower their risk per trade from say 2% down to 1%.
They’ll then re-analyse and go over their trading strategy again to see why the trading strategy isn’t performing as well as they expected it to.
Confidence comes with independence, the more you have your trading strategy in order, tried and tested – the more confident you’ll be as a trader for your financial future.
“Wisdom yields Wealth”
Analyst, BlackStone Futures