An Overlooked Factor in Trading Success
11/10/2011 8:00 am EST
Traders so caught up in the action of the markets often forget that a proper attitude and effective management of their emotions are also part of a well-balanced approach to active trading.
One of the lessons trading has taught me is that the right attitude helps create the conditions to reach your goals. I am often tested on the importance of the right attitude, as I sometimes find myself falling into old patterns of hurry, stress, or negativity that come with approaching deadlines.
When I find myself feeling stressed, I have to first make myself aware of the stress, and then re-channel any negative thoughts into the positive feeling of the blessings I possess.
As a trader, once you get clarity on what you are targeting as your goal, your attitude then becomes critical to staying on the right track. A positive attitude will tend to open up your acceptance to new ways of trading, primarily in the areas of riding winners longer and being less hesitant to cut losers more quickly.
In the Merriam-Webster dictionary, the first definition of “attitude” focuses on “The arrangement of the parts of a body or figure.” Only at the fourth definition do we read that attitude is “A mental position with regard to a fact or state.” This implies that a person’s body posture is an important expression of his attitude.
I have noticed that when you are sitting in front of your trading screens, when you sit up straight, it tends to inspire more confidence than if you are slouching.
There are many other physical aspects to consider in how you cultivate the proper attitude. One I work on is steady and rhythmic breathing. In moments of excitability, I have noticed my breathing tends to become short and shallow. This is not conducive to long-lasting focus and concentration, so I will seek to become aware and then take deep breaths at counted intervals to get into deeper breathing and a more relaxed and focused state.
Usually, when we talk about attitude, we either think of people with positive or negative outlooks on life. The optimist expects good things to happen in life, while the naysayer is constantly blaming others for difficulties.
One of the key defining points between winners and losers in trading is the ability to take full responsibility for the actions and outcomes that occur in one’s trades. The acceptance of personal responsibility is a key difference between successful and unsuccessful traders, and success can be traced back to a positive mental attitude.
A positive attitude does not mean you never have negative thoughts, but it does mean that you become aware of negative thoughts quickly and seek to neutralize or reframe them into a positive vision.
A positive attitude also allows you to find new opportunities in the midst of losing trades. A positive attitude definitely is reinforced by past trading success, but when we ask which came first, the positive attitude or the successful trading approach, the positive attitude usually came first and helped cultivate the final outcome, which is trading success.
By Price Headley of BigTrends.com