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Self-Confidence

Achieving the level of being a self-confident trader is a worthwhile goal for anyone who hopes to reach for consistency in trading. A self-confident trader is decisive. Self-confident traders carefully plan a trade, patiently wait for the ideal market conditions, and execute the trade according to plan. As a self-confident trader, you know which trade has your name on it. You recognize the trades that best fit your own personality and trading style, and are willing to wait for them. Self-confident traders are not over-traders. You recognize the truth that trading less can be more profitable than trading more.

What has become obvious to us over the years is that with a self-confident trader there is no self-reproach, no second-guessing, just a cool, calm execution regardless of the outcome. The trade may turn out to be a winner. It may be a loser. But at the moment of execution, you are sure, decisive, and confident.

Developing the right amount of confidence must be done with care. It's important to not be overconfident. Overconfidence can lead to making impulsive, poorly thought-out trades. Not enough confidence can result in hesitation at critical moments of trading.

Strangely, overconfidence often reflects fear. When you are uncertain about your abilities, you may hide these feelings by acting overconfident. Human beings can really be strange in the ways they behave. One way for the ego to conquer fear is to deny it exists and to hide it by acting pointedly very confident. But this is false confidence rather than true confidence. When the pressure is on, the overconfident trader will crack under the strain.

Although some people have a general sense of low self-esteem, an area where they feel that they are incompetent, most people have an overall positive view of themselves; they see themselves as able to master most situations, which is why they often think that trading will be easy for them.

Trading, can shake this general sense of confidence because it is a new undertaking offering challenges and uncertainty. Trading is definitely something that most people find unfamiliar and difficult to master. Understandably, they feel a sense of anxiety about their trading success. They may fear that they may wipe out their account and have difficulty recovering. Or they may worry that they could lose their confidence altogether.

There's only one way to combat these fears. As a trader you must gain as much real experience with the markets as possible. Getting such experience cannot be done by paper trading or trading on a simulator. It has to be done with real money.

As a trader you must develop and use reliable trading strategies and learn how to identify the market conditions in which they are likely to produce a profit. With time and practice, and a lot of persistence, you eventually develop the kind of trading skills that brings success. With each successful trade comes added confidence until you learn that you can trade under a variety of market conditions, and recover unscathed from setbacks. After gaining extensive experience with the markets, you develop a true and lasting sense of confidence that isn't easily impacted by the daily changes and volatility of the markets. In the end, trading the markets successfully requires a balanced sense of confidence--not too little and not too much. You have confidence in yourself and in what you are doing. A healthy respect for what the market can bring should always be there. Through experience and real trading, you can build the skills you need to trade profitably, consistently, and with confidence.


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Master Trader Joe Ross wants you to learn trading and he created products to do just that, teach you how to trade. Go to our website to find which ones best fit your trading style.



 

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Tuesday, 04 October 2022

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.