Similarly to when opening up a new business, trading requires a certain level of confidence in oneself to succeed. Confidence is the pillar of any successful trading journey and many new traders end up not having enough courage to handle the risky endeavors that successful trading needs to bring in profits. Here we will go through four simple, yet essentials ways how you can boost your confidence whilst trading.
Learn your trade.
The best way to boost your confidence in anything you set your mind too is to challenge yourself to learn all that you can about the subject. Subjects such as trading might be overwhelming at first, with so many trading styles, techniques, approaches, and terminology to learn, however, daily trading will set you on the right track to becoming knowledgeable and clearer in your daily trading decisions. Even when you feel like you cannot learn more about the subject, you will realize that although you have prepared yourself well, markets will remain highly unpredictable. Because of this, traders often find themselves feeling like they never know whether their trades will be successful or a waste of time. This is why shifting your focus onto your trading plan rather than your losses and profits, will help you become consistent, disciplined, and eventually profitable in your trading.
In today’s world, finding authentic and unbiased information online about trading techniques and plans might be a bit of a challenge, however sourcing out other traders like yourself through online forums or groups, is a great way to share and learn through other traders’ experiences.
Be confident enough to walk away.
Working with such an ever-changing environment, which is what trading is all about, can make it easy for you to fall into the trap of constantly sitting at your computer/device monitoring your trades. This can be detrimental both to your trades as well as your general wellbeing. Confidence comes with time and experience, however in the beginning, even though you might not feel confident enough to do so, you need to make yourself believe enough in your trading plan and be able to walk away from your trades, even if this comes at the risk of losing your trades. Even if you do lose out on your trades, remember every loss is a great opportunity to learn and develop your trading strategies.
Use your winnings and losses to become better.
Being successful at trading, especially for a long period, might make it easy for traders to become overly confident. A great way to keep your confidence within the ‘safe zone’ is to analytically reflect on your losses, to learn from those mistakes, but also to analyze your wins. Trading with small amounts that you can afford will help to make your losses feel more like learning curves rather than personal disasters. Some traders go on to say that your losses might be your most fruitful mentors. It is best to keep in mind that in trading, there are no winners without losers, so prepare yourself for many losing trades and learn how to extract the important information from each loss you will inevitably encounter.
Set your rules and follow them.
If you’ve attended trading training or if you’ve done your research online, you’ve heard of strategies, how to identify them, when to apply them and how to manage them once they’ve been applied. Strategies are nothing but a list of rules that help you to recognize and apply your methods for making a trade profitable.
Making your list of rules that accompany the trading strategy you’ve opted for, is a great way to keep yourself focused and motivated for your current and more importantly, your future trading. Many beginner traders, unfortunately, give up after the first few losing trades, however that moment when you feel like this might not be the best for you, is the moment when you learn the most.
Making yourself a clear list of rules, writing them down, and sticking them up where you trade, will make it easier for you to be disciplined. Set up rules such as – When will I trade, how much risk am I going to carry daily/weekly/monthly, what markets am I going to focus on, etc.
Your list of rules will change and develop as you learn more about who you are and where you stand as a trader. Consistency and discipline are the two main ingredients you need to have to help yourself develop the necessary confidence traders need to become successful. Do not expect to make massive profits on your first few trades, because the probability is, you won’t. Learn the basics, make your rules, stick to them, and believe in your choices. Happy trading!