From all the reading I’ve done, amazing people I’ve talked to, and my own life observations, I’ve come to the conclusion that: Confidence is everything! No matter what you do in life, you have to believe in yourself and maintain a strong state of mind…especially if you’re a stock trader.
Stock trading might be one of the toughest professions out there. I don’t mean just making some money in a good market, I’m talking about CONSISTENTLY profiting over a long period of time. It’s especially hard because you will usually be wrong more often than you are right, and this can constantly beat anyone down. Trust me, I’m frequently wrong and make mistakes EVERY day I trade. The key is to contain those mistakes and keep your losses to a minimum. I don’t claim to be a “self-help” expert, but I would like to pass along a few tips to help improve confidence:
1) Strengthen your mind and body. The best way to keep your mind sharp is to read and “feed it” with strong ideas. The mind is like a muscle. If you don’t keep it strong, it will eventually weaken and cause you to make poor decisions. In my Recommended Reading List, I not only suggest market books, but also some “self-improvement” titles to help maintain a positive state. I refer back to these books many times, as they can be great reminders and help keep one focused.
Strengthening your body is easy, but you have to get off your ass. I’m not a fitness expert, but it doesn’t matter because we all know what to do: Eat healthy, exercise, etc., etc. This may sound crazy but the better shape I’m in, the more confident I feel about my trading.
2) Surround yourself with great people. You become who you hang out with. If you surround yourself with motivated and encouraging people, guess what? You’ll find yourself making major improvements in your life. Unfortunately, you have to cut some of your friends loose when you start doing better, especially the ones who drag you down. By the way, this concept is not mine, this is just COMMON SENSE!
3) Focus on the positive. Recently, a friend of mine owned 5 stock positions. He called me to complain about the 1 position that was down (meanwhile, the other 4 were up on the day). I told him to shut up, get rid of the 1 that was bothering him, and focus on the 4 that were keeping him happy…and then I hung up on him (I know, I’m a great friend, huh?). But seriously, life is all about what you choose to focus on. As Carlos Castaneda said: “We either make ourselves miserable or we make ourselves strong. The amount of work is the same.” In other words, focus on the things that you are blessed with (family, health, etc.), and learn to let go of the nonsense.
Some of the best traders I know have an amazing trait that I admire and try to emulate. Specifically, the ability to let things go. I struggle with this because I hate making mistakes, but I’m learning to be more easy going and laugh more often, especially because the stress is not worth it. Bottom line: Keep your mind sharp, keep your body fit, keep great company, and keep focusing on the positive things in your life. Trust me, I’m still working on it too, and I plan to continue improving indefinitely.