The solitary nature of trading means that, often times, if we don’t say it to ourselves, there’s nobody else around to say it for us! Of course, “it” can mean most anything, from positive self talk and helpful affirmations, to brutal chidings in response to mistakes and negative outcomes. Sometimes, we traders even do both to ourselves throughout the course of the same trading day!
Needless to say, self talk is common among traders, just like it is with practitioners in other disciplines, but having a knack for positive self talk, and not so much negative, is a valuable skill that’s often overlooked.
When it comes to trade psychology and the mental game, positive self talk can change for the better your entire trading experience, from how you develop your skills and knowledge, celebrate your successes, and how you accept the inevitable bumps along the way. So here’s how positive self talk can work for you in your trading, and a few times when you’ll stand to benefit from it the most.
Negative thinking can have a serious “snowball effect” where toxic thoughts just multiply as time passes, much like a snowball rolling downhill. Soon, we lose confidence and focus, and are no longer in any emotional state to trade…or at least trade well. Positive self talk can stop and even reverse this process, enabling the trader to overcome doubts and negative emotions and get back on track much sooner. Here’s an example of how it works:
Thought: “Another losing trade. What were you thinking? Jeez, how stupid could one person be?”
Humans are emotional creatures, so it’s natural to feel something there, and it’s even OK to have that negative thought run through your head. Go ahead and admit it, you’ve probably thought and even said worse than that to yourself before, right?
This is the point where mindfulness must come into play, though, and where you identify the negative thought pattern, and make a conscious decision to reverse it by implementing positive self talk instead. In this case, that might include:
“Well, it was a minimal loss that’s deemed acceptable by my strategy. Losing trades are part of the game, but that was excellent plan compliance and risk management. Nice job staying committed to that!”
Or maybe, “My job is to take every trade that satisfies the conditions set forth by my strategy, and that one did. I’m proud of the way I analysed and qualified that set-up, and I’m trading with opportunity flow on my side. Let’s be resilient and move on to the next one!”
Make sure, of course, that you aren’t just telling yourself those things, and that you are indeed trading in accordance with your plan. If not, then you need to identify and correct the problem, but regardless, by using positive self talk, you keep any negative thinking from spiralling out of control and put yourself in a much better frame of mind moving forward than you otherwise would.
But while bouncing back from a drawdown isn’t the only time when positive self talk will help you…
More than just changing your mood and reversing negative tones, positive self talk can also be used to set and/or maintain a positive tone for you in your trading, most notably in situations like these:
Before trade execution: Emotions tend to run pretty high in the moments before trade execution. Right then, it’s easy to think about possible outcomes, maybe start doubting yourself and/or the trade, and impart undue pressure for things to work out. That’s when implementing positive self talk can be helpful for staying grounded and objective, calming fears and doubts, and perhaps providing the validation you need to execute with confidence and clarity.
For example, “Let’s block out these thoughts related to outcomes, and think only about the merits behind this trade at hand. I stand behind my analysis, and I’m ready to act with confidence and conviction!”
At the start of the week and/or trading day: Often times, a new day, week, month, or quarter feels like a fine time to get refocused on certain objectives, or maybe reverse prior fortunes. And while the hope and promise that comes with each new day or trading opportunity is essentially unlimited, what it takes to be successful trading doesn’t change from day to day, or week to week. Sometimes, a gentle reminder of that may be just what you need to keep things simple and straightforward with regard to trading.
“I’m grateful for the opportunity I have to trade another day, and only want to be diligent, be disciplined, and trade according to plan.”
After winning trades: Some may say otherwise, but I think it’s important to celebrate your successes, both in trading and in life. Of course, you never want to become complacent or overconfident, but taking time out to recognize accomplishments helps reinforce positive behaviour, boost morale, and maybe most of all, make trading more fun.
“I love the feeling of a winning trade! I’m so proud of myself for the way I planned and executed this set-up from start to finish, and it goes to show that patience, hard work, and plan compliance pays off in the long run. It will be great to share this one with my family and support system, too!”
Positive self talk is an especially important component for self-directed traders, thousands of whom are enjoying the many membership benefits they receive from The Lazy Trader community. There’s continuing education, trade ideas, and a 24/7 network from which you can gain support and positive feedback. So why wait? Click the below banner to start your risk-free trial today!