In 2015, before I went on to create Trading Composure, I spent some time traveling the world. And on that traveling journey, I met dozens of traders in countries like France, the U.K, Germany, North Africa, India, Malaysia, Canada, the U.S…
Some of these good people were struggling traders at the time and I had the opportunity to work with them and help them improve. We would go through the entire pre-trading process together, then I would watch them trade and give them instant feedback.
Lo and behold, all of them were able to trade effectively when I was behind watching over. But the moment I left, their old unfruitful habits took over again.
This was a fascinating observation for me. How could these people be disciplined and process-oriented in my presence and fall off the bandwagon days and weeks later?
The answer is twofold. It’s 1) a lack of self-assurance and 2) a lack of personal accountability.
In this post, I want to focus on the self-assurance part and I’ll tackle the personal accountability part in another one.
What Is Self-Assurance?
Self-assurance… now, there’s something we could all use a little bit more of, right?
But exactly what is self-assurance other than a feeling?
Let me attempt to define it. Self-assurance is an individual’s belief in his/her capabilities to navigate difficult situations and execute a set of actions required to get the desired outcome.
In other words, you accept and trust yourself and your abilities, and this gives you a sense of control in your life.
Now, let me tell you what self-assurance isn’t. It isn’t cockiness or arrogance. Those are polar opposites… cockiness and arrogance are grounded in fear whereas self-assurance is grounded in trust and acceptance.
From a performance perspective, self-assurance is the certainty an individual possesses about their own capability to be successful. It is not the certainty that they can control external conditions.
In trading, self-assurance isn’t being absolutely sure about your market predictions. It is not “this trade will be profitable”, rather it is “I will be okay if this trade isn’t profitable.”
Self-assurance is understanding the process of trading and believing in your own ability to do what you have to do, no matter what the market throws at you in the short term.
How Self-Assurance Grows
Self-assurance has always been tough for me. Growing up I was never really a confident, self-assured person. I had a crippling fear of failure… and it pretty much affected all aspects of my life.
Later when I became a trader and was consistently losing money because of that same fear, I realized that this enduring pattern in my life had to stop.
I think this is something we all face to some degree. The key question is: how do you overcome fear and allow self-assurance to flourish?
Below, I outline 8 things that have helped me greatly.
None of them is ground-breaking, and the list is certainly not comprehensive, it’s just a few things that have worked for me.
Here they are, in no particular order:
#1. I’ve Developed The Habit Of Positive Thinking.
In my Trading for a Living Course, I take the camera and give you a little glimpse of how my morning routine looks like.
And it always starts like this: as soon as I become awake and my eyes flutter open, I generate empowering thoughts and positive feelings.
This sounds so trite, but my goodness it works! It sets the tone for my day and helps me find the good in the bad, which in turn helps my self-assurance grow little by little.
Try it if you haven’t. Turn positive thinking into a habit. Seriously.
#2. I Kill Negative Thoughts With Kindness
This builds on the above item. I’m a neurotic person. That’s how my mind is wired. I think, think, and think. And not always positive thoughts—in fact, I would say that my natural inclination is to think negatively and ruminate.
This is both a blessing and a curse.
It’s a blessing because it makes me the creative person that I am. It helps me think deeply (and obliquely) about subjects that catch my interest.
It’s a curse because, if left unmanaged, this tendency to overthink leads me to depression and melancholia.
That’s why meditation and mindfulness are very important habits in my life. They help me become more aware of my self-talk, the thoughts I have about myself, and what I’m doing.
This is very powerful. When I recognize negative self-talk, I greet it with mindfulness and kindness. And I watch it all dissipate on its own without force or reprimand.
#3. I Prepare
Another little step to winning the confidence battle is to prepare.
It’s very hard to be a confident trader and maintain a certain level of consistency if you don’t have a pre-trading routine where you identify what you’re going to trade, your levels, your risk management protocols, etc.
If you think about it, trading is like taking an exam: if you don’t prepare, chances are that you won’t magically know the answers.
And if you do know the answers, you might be unsure about them and, as a result, get struck by performance anxiety.
That’s what a lack of preparation does. And it’s the same in trading. Without preparation, you won’t know what you’re doing and you won’t have much confidence in your abilities.
But if you’re fully prepared, nothing will surprise you. You’ll have an answer for every situation.
So, that’s what I do. I always, always, always come prepared! And when the trading session opens, I know exactly what I need to do. There’s no “uhh…” or “hmm …” I execute confidently.
#4. I Know My Values And I Live Them
What are the values upon which you make decisions in life?
Values are standards you live by. They’re a consistent way of doing things. What you value is the reason you work hard, and go through adversity, and so it has to be clearly defined in such a way and constantly brought to mind.
To be successful as a trader, we must consistently behave in a value-directed way every single day, in every trade, under every circumstance.
And yes, there are barriers to this. As said at the beginning of this post, most of the traders I’ve worked with fell back into their old patterns again as soon as I left. That’s because emotions got in the way. They got distracted, lost focus on their value, and gave in to their desire for comfort and relief by reacting out in impulsive greed or fear.
And I’ve experienced this myself. Many times. But these days, when I’m challenged by the market, and by my own emotional turmoil, I practice mindfulness and bring to mind my values. Always. And this works wonders.
I’ve written more about values here.
In the Trading For A Living Course, I help you identify your values so you too can start living by them.
#5. I Actively Seek Risk And Embrace Failure
There isn’t a person on the face of this earth who doesn’t have insecurities—some are just better at dealing with them (or perhaps hiding them) than others.
Fear is universal. For me, the fear of uncertainty; the fear of loss and failure, those controlled much of my life until I decided to not give them power over me anymore.
And I did that by simply understanding risk (what it is and the purpose it serves), accepting failure, thinking less, and taking action.
Fail, fail, and fail! That’s my motto.
Confidence is something that grows with experience. As you grow as a trader and you transmute your mistakes into competence, you automatically gain in self-assurance.
But a caveat: don’t put yourself in a situation where failure will have disastrous consequences on your finances and overall mindset.
That’s why I always preach the importance of trading small sizes, especially to beginners. You don’t want to trade big sizes right from the outset and risk damaging your confidence.
Big losses and failures can get internalized and damage your sense of self. So, be strategic about risk-taking and temper your tendency to want to get rich quickly.
#6. I Fake It Until I Make It
The cool thing with self-assurance is that you can fake it, and because on some level the brain doesn’t know the difference, your mind slowly starts adopting this new behavior as the new norm.
But make no mistake, this isn’t easy. Coming back to the traders I’ve worked with, when I was there watching over them they did fine. They executed their trades flawlessly. Losses didn’t affect them. They remained focus on the process of trading well.
They were able to fake it so well because they knew they were being watched and they had this internal drive to be and act their best self in my presence.
But soon after, left to their own demise, they fell back right into their old patterns again.
This shows the importance of staying diligent and committed. What we need to accept as traders is that we should never feel complacent. The moment you become complacent is the moment you lose your mental edge.
Complacency is not acceptable… not in trading where uncertainty is the name of the game. As traders, we must continue to push ourselves to outgrow our old patterns and adopt/reinforce new ones that are more conducive to success.
And learning to recognize complacency when it starts to peek its head is the first step. And practicing what you want to be, like it’s your new religion, is the second.
The old must die for the new to take hold.
#7. I Set Small Goals That Are Impossible Not To Achieve
People often make the mistake of shooting for the moon, and then when they fail, they get discouraged.
Personally, instead of shooting for the moon, I like to shoot for monetary or process targets that are much more achievable.
I set goals that I know I can achieve with a very high probability.
And you know what that does? Every little successes that I get helps further build my self-assurance. Nothing is more powerful in building self-assurance than the actual experience of success.
A bit like a snowball effect, small successes lead to greater confidence, and greater confidence leads to greater successes.
#8. I Empower Myself With Knowledge
This is along the same vein as getting prepared … by becoming more knowledgeable, you become more confident.
You can acquire knowledge and empower yourself in many different ways, but one of the surest ways is through reading books.
Personally, aside from science fiction novels, I like to read books on philosophy, psychology, investing … and the wealth of knowledge I have acquired has helped me become a better decision-maker overall, which has helped increase my level of self-assurance.
Now of course, there’s the Internet as well. In this day and age, you don’t necessarily have to read books—you could listen to audiobooks, take an online course, read articles, spend time on Youtube…
You choose how you want to acquire knowledge but always remember: knowledge is power.
We cannot talk about successful trading without addressing self-assurance because it is a significant factor in performance excellence.
When you believe you can do something, it’s like you’ve got extra energy to go after it. You pursue it with more vigor, greater focus and drive, and you persevere through adversity and are less likely to be discouraged.
On the other hand, when you lack confidence, it invites fear, insecurity, and doubt. You often avoid difficult goals and are more easily distracted about what could go wrong—which often becomes a self-fulfilling prophecy.
The steps I’ve listed in this post—positive thinking, preparation, self-awareness, experimentation, small successes, knowledge—have all helped me improve my self-assurance.
Don’t get me wrong, I still have fears. But they don’t have the same control over me and my decisions like they used to. And this has been a real game-changer!
I hope you can implement these steps, break through your walls of fear and come out on the other side.