Increasing your confidence as a trader

BellaMike Bellafiore's (Bella's) Blogs3 Comments

So you see that a trader really can make it.  He has stopped losing money, put up some good days, works hard, loves the work, and is bound to getting better.  At this point I move to work on building his confidence.  But how do you do this?

The worst thing is to applaud a high P&L day.  A good idea is to applaud a day he stays late and really does a nice job working on his game.  Applaud the trader working hard.  Applaud the trader making good trades.  Applaud the trader getting better at an element of their trading through concerted practice.  Guide the trader to build from their strengths.  If you are trading solo applaud and guide yourself then the same way I do for a new trader.

I asked for just some quick thoughts from trading psychologist Dr. Jonathan Katz of High Performance Associates and below are his thoughts:

The mantra is “how do I get better?”…..I always support their positive qualities while helping them refine and improve their work process, focus/concentration and decision making skills. Confidence is an outgrowth of positive results….not always measured by P+L, but often by more subtle changes…..Two batters can go 0-4 in a game….1 striking out frequently on pitches out of the strike zone….the other with several hard line drive outs….same batting average for the day….but very different levels of “success” when looked at more closely. If the line drive hitter keeps swinging the bat well, the hits will come…..if the first hitter does not become more disciplined at the plate he will be in AAA before he knows it!!!

Mike Bellafiore

Author, One Good Trade

3 Comments on “Increasing your confidence as a trader”

  1. As a solo trader, I find that I must continue to tell myself, “focus on process, not outcome.” The first leads to the second. I should reward myself for successful executions of my plan. If my plan is not making profit, then it needs to be changed.

    But, also, I must set concrete goals that can 1) be achieved during the next trading day, and 2) be measurable, otherwise I feel as if I’m gambling, not trading.

  2. Met Dr. Katz a few times… he tells that baseball analogy really well in person =)

    I’m at that level now… we’re I’m going flat.. .having both big up days (woohoooo) and some disastrous down days (can I take tomorrow off?). Right now, I’m spending most of my time replicating what I do right and trying to eliminate the things I do wrong. Another challenge also for developing traders is to accept that you will make mistakes…. a lot of mistakes, but as long as we process that moment as an opportunity to get better… it’s not necessarily the worst thing that can happen.

  3. I’d also like to applaud our fine military for taking out that dirtbag in Pakistan. I applaud you Mr Bella for another great article. We are so fortunate to live in this awesome country and learn from the best.

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