Weekly Motivation

Trader's Belief and Actions

Winning traders and losing traders experience the trading environment differently. It makes them feel different and as a result their actions consistently vary. In psychological terms, they interpret the market differently because they have a separate belief system in the way that they see themselves relative to the stock market.

Below is a copy of the beliefs and actions that successful and unsuccessful trader's adopt. I've found it useful to have a copy printed, next to my computer at all times. Why would a successful trader do this you ask? I believe, no matter how good you may be, you must always keep practicing the basics.

Belief statements that different traders can make:

**Winning Traders**

- The markets provide an opportunity

- The markets exist to give me profits

- If I get stopped out then I have to reevaluate the trade

- If the market doesn't do what I expect then I must reconsider

- I'll take one trade at a time.

- I don't have to be perfect; I just have to do my best.

- Money is not that important

- Losing is part of the process of making money

- Trading is a game, I know I can win

- Every setback provides me with new market information

- I can wait for an opportunity to come

**Losing Traders**

- I must be in the market now

- If I lose on this trade I am a loser

- If I wait for my trading rules I'll miss out

- If I get stopped out I have bad luck

- I can't lose money

- The market makers got me again

- I'm an idiot, how could I lose money

- What will they think when I tell them I lost money on this one?

- The stock market is rigged

- It's impossible to get a good fill

- I cannot take a loss

- If I take my profit then I am right

These different beliefs create different characteristics of winning and losing traders:

**Winners**

- Get pleasure from trading the market as an end in itself

- Not motivated primarily by money

- Confident that they can make money in the market

- Not afraid to take a loss

- Patient

- waits for opportunities

- Uses a highly planned strategy

- Is well prepared, done his homework

- Measures the risk/reward ratio of every trade

**Losing Traders**

- Never define a loss

- Locked into a narrow belief system

- Hesitate to make a trade

- Do not stick to a system

- Trade by whim

- Trade by emotion

- Have no consistent strategy

- Do not practice risk management

- More interested in proving themselves right then being a success