Trading Affirmations: for the Successful Trader’s Mindset

Positive affirmations work - in all areas of our life, including trading financial markets! Talk to any life coach, mentor or motivational speaker (the ones who actually have some form of credentials!) and they will most likely tell you that they are useful in helping to manifest your goals and bring about positive and permanent change to your life...in whatever area you so desire. Why should trading financial markets be an exception? We have trading affirmations too!

An affirmation is every word and inner dialogue you have and are generally present to the subconscious mind and they help to construct our life experience. Some do this positively, others negatively. Bearing this in mind, it is a very useful exercise to programme the mind so that not only can you feel better about who you are and what you do, you can also manifest the changes in your life that you so desire.

Affirmations can work in any situation. Whether it's affirmations for love, self-esteem, success, or health...you can be rest assured you can come up with your own in order to quash old beliefs that may have hindered you and manifest real change in your life.

They can enable you to achieve the life you've always wanted for yourself!

Here are some rule-based, positive trading affirmations.  I have modelled on the common habits of the winning minority of profitable traders and what they do to obtain their consistency.

Repeat these trading affirmations daily in front of the mirror and see how they can help dramatically improve you and your trading.

Trading Affirmations #1:

"I am a successful and profitable trader"

Make this statement your first affirmation as this sets the frame for the following rule-based affirmations which are all cornerstones to successful trading. Even if you are not yet consistently profitable, say it. Do NOT say it in the future tense, ie: "I will become a successful trader," as you will be nudging this end-game objective into the distance every time you say it...very much like dangling a carrot in front of a donkey, or even a heavy smoker perpetually saying that they will give up the habit "tomorrow".

Trading Affirmations #2:

"I have full belief in my strategy"

If you are trading a strategy that resonates with your personality, availability to trade and has been back tested and forward tested to be consistently profitable over a number of years, then what is not to like?

Trading Affirmations #3:

"I will trade according to my strategy's rules and not gut feeling"

Stick to your strategy! After all, the very strategy you have belief in (which dictates your rules for entry, management and exit) are powerful filters designed to keep you away from whimsically trading the market "noise" which many rookies are seduced into trading. Accept that the market can do anything ay anytime and that 'gut feeling' is not a sufficient reason to overrule a profitable trading strategy...not least the one you chose to trade as you have belief in it!

Trading Affirmations #4:

"I will be fully accountable to for my actions in the market"

You are master of your own destiny, from choosing to pursue trading in the first place, to selecting the strategy which works for you to executing it according to its rules.

If you place a trade based on a set-up outside of your strategy and it loses money, it's a bad trade and you are to blame. After all, you pulled the trigger and made the decision to place it. Conversely, if you placed a trade which, again, wasn't based on your rules and it made you money, it is still a "bad trade". This is because even though you've enjoyed the process of making money, you have subconsciously communicated to your brain that it's ok to do that and you will be far more likely to do this again, perpetuating what is often a vicious circle.

Trading Affirmations #5:

"I keep a journal of all of my trades - both losers and winners"

Many see this as a tiresome and laborious process...and, boy, it is! However, if you keep a log of your trades and their outcomes, then you're far more likely to stick to your plan and be accountable for your own actions. After all, your written trade journal is a reflection on your ability to demonstrate you are a successful and profitable trader over the long-term...by trading set-ups which fully conform to the rules of the strategy you have belief in and have chosen to trade.

Trading Affirmations #6:

"I always keep the trade risk low" (ie: 1-2% of account value)

The success of any given strategy is determined over as sample of trades - the bigger the sample the more representative it will be. In order for back testing and forward testing results to be as scientific as possible (and to get a clearer perspective as possible as to its success), it makes sense to risk the same amount for each and every trade you take. You should always keep the risk low as there is nothing worse than watching the fluctuating balance of your trading account when you know you have risked big amount based on feeling.

This is especially the case when you consider how there is no guaranteed outcome for a trade set-up, no matter how good it looks!

Trading Affirmations #7:

"If there is no set-up based on my strategy I happily stay out of the market to preserve my capital"

It's ok not to place a trade if the rules to your strategy are not met. A lot of have-a-go traders (who ultimately blow up their account) self-sabotage by endeavouring to have a trade running all the time as they feel that the more trades they place, the more money they will make. This is simply hogwash! It is often the trades you don't take are the ones that make you the money - the trades which may not fulfil the rules of your strategy but you may "feel" are worth "taking a punt" on. Leave them well alone!

Unknown to many, the first objective for professional traders is to breakeven, then make a profit. In order to make a profit regularly, they must have an edge in the market and this is through sticking to rigidly to a strategy. Accept a day/week when there are no trade-setups as a worthwhile money saving exercise rather than getting frustrated and placing a trade out of boredom.

"Trading Affirmations #8:

"I only follow trades with a high reward/risk"

By trading trade set-ups which are high in reward (while keeping the risk low), not only are you are making the trade more worthwhile you can also have console yourself with the fact that if the trade goes your way, you are set to make a lot more than you can potentially lose...but if you lose, at least this is kept to a small fraction of your account. By selecting trade set-ups with, say, a 3:1 reward/risk profile (targeting 3% of profit potential by risking only 1% of your account), you can also afford to trade fewer trades and be yet more discerning in your trade selection.

Trading Affirmations #9:

"I choose trading for long term gain rather than a quick buck"

Be realistic in your expectations from trading and accept that and small percentage gains made on your trading account over the long term in a conservative fashion are far more desirable, and stable, than making a wild percentage gain only to be followed by a heckle-raising drawdown. Which would you prefer? Consider that the bigger the percentage gain the strategy may make you, the bigger the drawdown will also be.

Remember that the percentage gain or loss touted by a "system" or strategy is not representative unless it has at least 5 years of back testing results to demonstrate that it has at least stood the test of time in a variety of different market conditions.

Unfortunately there are a lot of scammy products and services in this industry which publish jaw-dropping returns, but are very selective in the date given!

Treat learning to trade as a skill-set learned and developed over the course of year(s) very much like a university degree. Do you think that a heart surgeon mastered surgery in his spare bedroom in his free time?!

Trading Affirmations #10:

"I shall not have an emotional attachment to the outcome of my trades"

Simply place the trade and let go...assured by the fact if the trade does go in your favour then you are set to make potentially a lot more than if it goes against you, thanks to our selection of trades with a reward potential. Too many people self-sabotage by watching their losing trades by crossing their fingers and legs in the hope it will go in their favour without accepting that some battles should be lost in order to win the war.

Trading Affirmations #11:

"Other people's beliefs, news and fundamentals will not affect my trading decisions"

Every Tom, Dick and Harry will have an opinion about there they think the market will go or where they think the market will turn next. But do they trade your strategy or your timeframe? Are they one of those people who only crow about their winning trades and never their losers? It's crucial that you stick to your guns and trade the rules according to your chosen strategy. Turn off Bloomberg and fold that newspaper away as they will only serve to be a distraction. If someone influences your trading decision and you ultimately lose money, it will still be your fault.

Trading Affirmations #12:

"I shall base my trading decision on probabilities, trading what I see and not what I think"

Don't fall into the temptation of trying to over analyse the market too by looking at fundamental data and reading news reports. This is analysis paralysis.  We are technical traders after all, using technical analysis to gauge the probability the market turning in any given direction and this is based solely on what we see on the chart in the moment. After all, when our consistently profitably strategy was backtested on the charts you can be assured that this was done based on price action and not the news released which may have been released at the same time.

Trading Affirmations #13:

"The market is irrational and can do anything at anytime"

The market doesn't owe anyone anything, apart from those who are disciplined to play the odds by following rules over the long-term. Just because you've told yourself turned up on time to the London open, it doesn't mean she will smile on you...no matter how much you've brushed up on your homework! The market can do anything at anytime, and as profitable and successful traders we need to accept that our chosen edge is what will keep us going in the long-run, through the inevitable drawdowns and percentage gains along the way.