Success requires a great degree of thoughts control. Hence, you need to be pumped up and believe that you have what it takes to trade successfully. Motivation, positive thinking, and persistence are the main keys.
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According to research, the average person conducts between 50,000 and 60,000 thoughts per day. A vast majority of these thoughts are mind talk (or self talk), meaning self-perception or one’s personal evaluation of his or her self-worth. Psychologists estimate that about 80% of these thoughts are negative. If nearly all of one’s thinking is negative, their outlook and performance are most likely to be poor. Likewise, the exact opposite is true. This is why positive mind talk is crucial in everything you do.
Thus, before a trader can expect to succeed, he needs to take control of his thoughts. This means developing performance enhancing thoughts (PETs) instead of performance interfering thoughts (PITs). Examples of PETs may be “you have what it takes to become successful” or “this is truly a challenge worth taking.” On the other hand, PITs might be thoughts as “the market is out to get me, I’m cursed!” or “are there really any chances of making money and becoming rich?”
Another important aspect of thinking is attribution theory, the way a person explains good or bad events that happen in their lives. Likewise, there are three concepts that either make a person optimistic or pessimistic:
- Perslonaization – how personal people take events
- Permanence – the length of time one dwells on an event
- Pervasiveness – how contextually or globally one makes the event
Our level of perseverance depends on our mind-talk. In order to build performance, we need to develop positive thinking. This begins with monitoring our thoughts. First, we must understand that thoughts are habitual and automatic. Hence, we think our thoughts, they just don’t happen to us. Second, we must learn to take responsibility for our thoughts and then take control.
Keep a “Thoughts Journal”
Doing this begins with creating a “thoughts journal” which involves:
- Writing down our thoughts as we notice them in either one of two columns: PETs or PITs.
- Making a note of the time and situation of as many thoughts as possible
- Reviewing our journal after seven days
Once we go over the journal, we compare our total amount of PETs with PITs as well as the situations that triggered them. Also, we will find that we have recurring thoughts, those that happen over and over again. We then need to analyze them and see what the cause behind them are. After we have established awareness over all of this stuff, we then need to take control of ourselves.
The process of canceling our negative thoughts and replacing them with positive ones is known as thought stopping. As you may have heard it said before, we are our own worst critics. By thinking bad thoughts, we are only being self-critical and these negative beliefs only exist with in ourselves, nobody else. In essence, our negative thoughts are only what we make them out to be, nothing else. Although our inner-critic provides much of our feedback, a lot of it is more harmful than good. We must use our inner feedback wisely as if a coach is giving it to us – not as a personal attack. Imagine this coach wants to see you succeed and thus, will deliver the message in a positive way to assure that happens.
Transforming Negative Thoughts to Positive
So imagine, two beings inside of you: the inner-critic and the coach. The inner-critic will try to tell you that you can’t trade successfully but the coach will tell you that you can. Converting negative thoughts into positive ones is essential if you really want to survive. Here are some examples:
Negative: I was an idiot not to take on that trade.
Positive: When I see another trade like this, I will act on it diligently.
Negative: Don’t be a fool and blow this trade.
Positive: Relax and give it some thought, then execute it.
Negative: Lately, the market is trying to make me lose all my money.
Positive: The market doesn’t know I exist so how can it sabotage me?
Negative: It seems like everybody is a better trader than I am.
Positive: Everyone is different, surely enough they all have lost at one time or another.
Negative: Working is nothing but stress.
Positive: Working is challenging and the adversity will help make me a better trader.
So, how can you convert negative thoughts to positive ones? As your inner-critic shouts them out, your coach should correct them. Hence, you must:
- Identify it – pay close attention to your thoughts and pick out the positive, negative, and neutral ones.
- Cancel it – as a negative thought crosses your mind, it is only coming from your inner-critic. Create a picture or an icon like a red stop sign and say “STOP!”
- Replace it – take that negative thought and change it into a positive one. What should your inner coach say.