Editor's Note: For those interested in both winners and losers, the 8 beliefs of unsuccessful traders can be found here.
One bright day in the middle of night, 2 dead boys rose to fight. Back to back they faced each other, drew their swords and shot one another. A deaf policeman heard the noise, and saved the lives of the 2 dead boys. If you don't believe this lie is true, ask the blind man, he saw it too. -Author Unknown
We're hard-wired to believe -- and to hold on to our convictions -- often in the face of contradictory evidence. In life outside the markets, this may actually be a source of strength. However, it doesn't usually serve a trader well. One of the most important questions for the trader to ask every day is: What do I believe that's not true?
So how do we know the truth? The markets tell us. It really is that simple -- and yet, it's so difficult for most to accept and practice on a daily basis.
It's important for traders to be able to assess their beliefs regularly, because -- at any given market moment -- they're a composite of those principles. Fortunately (for some) and frustratingly (for others), beliefs about the markets are fungible and fluid; they can change from minute to minute.
The successful trader is in the flexible flow with this -- and changes accordingly. Beliefs of Successful Traders 1.
The markets provide a constant stream of opportunities. 2.
If I miss an opportunity, another will come along. 3.
If my position is stopped out, the hypothesis that got me into the trade was incorrect. 4.
I take one trade at a time, and stay in the moment with it. 5.
I strive for excellence, not perfection. 6.
I maximize profits by losing small. 7.
I am not
my trade. 8.
I take complete responsibility for my thoughts, feelings, and actions in the markets.
No positions in stocks mentioned.
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