cementing confidence

Confidence is a much-needed trading component and, unfortunately, isn't one to stay but needs constant maintenance.

Worse, it is fleeting, meaning it can be gone instantly.

From a psychological trading perspective, any trader can be wiped out by a massive loss or an otherwise strong event that erases his confidence.

This means that from a risk perspective, it isn't the money lost that wipes out a trader; it is the confidence gone that is much more the Achilles' foot.

Consequently, we need to guard the confidence gains, consistently be aware of its value, and, through maintenance, keep this energy tank from depleting.

Reconditioning through a pat on the shoulder when one followed the process to a T (not for winning trades but process!) and especially when one's weak spots (whatever that might be for you, like FOMO, running stops, overtrading, commitment issues pressing the button for each signal, appropriate size and frequency, and so forth) were overcome through rules and process.

Visual conditioning is another important method, that is why you see me post this pic after very successful tasks mastered:

Most importantly, it is a reminder when your confidence is low, and I personally use a confidence journal.

The material collected makes me feel worthy, reminds me of the power of principles, and is ongoing work to keep the energy barrel for confidence full.

Confidence can also be erased outside trading, and resulting low self-worth kills successful trading quickly.

Here is a recent journal entry of mine:

Excerpts from Unknown Market Wizards by Jack Schwager

which are principle-based statements much in alignment with PPT philosophy

-trend following by itself is insufficient.

The critical elements are how you manage risk and how you take profits once you are in a trade.

-you have to trade your personality-

you have to feel at peace with how you are trading

-after you get out of a trade, whether you made or lost money, you have to forget about it like that. (snaps his fingers)

if you feel uncomfortable, you have to explore that feeling because there is a reason why you are uncomfortable

-I learned that keeping losses as small as possible is critical to capital preservation. The most critical thing in trading is mental capital. You need to be in the right headspace for the next trade.

-When Brandt gets into a trade, he expects it to work straightaway if he is right. The best trades just go.

-The more confident I am, the more aggressive I will be with the risk I take, but, especially, the more aggressive I will be with my stop.

These latest entries are confidence-building because they are so close to my trading beliefs that I feel supported in my trading approach since a market wizard employs the same principles.