THE POWER OF POSITIVE THINKING

Many things contribute to trading success. High on the list is having an effective trading methodology that helps you limit losses and maximize gains. Another important element is working hard to produce a constant flow of good trading ideas. But what is most important is simply having the right mindset.

Traders who aren't in the right frame of mind may still have success, but to produce a steady stream of profits over the long haul you need the power of positive thinking. Nothing determines your level of success more than the way that you think about the market.

Unfortunately, it is not as easy as it sounds. The right mindset doesn't mean wild bullishness and a belief that the market will go straight up forever. It is having confidence that you will find trades that work and the ability to shake off the trades that inevitable go wrong.

One of the keys to developing the right trading mindset is to embrace that you will make mistakes along the way. Even good traders will get burned, but if you try too hard to eliminate all your losers, you will end up doing very little. If you have the right mindset, you are willing to take on risk and if things don't work, you shake it off and move on to the next trade. With a positive mindset, you can handle the inevitable losers much better because you know that success is just around the corner.
Trading scared is a common problem and it can be hard to shake, especially if your trading capital is limited and you are trying hard to protect it. The fear of suffering any loss can freeze you and prevent you from taking any risks. When you start to go down that path, it can feed on itself and soon you will find that you are doing almost nothing because you are so scared that you might suffer a loss. And when you do trade, you take profits almost immediately and can't handle the slightest pullback in the stocks you are holding.

Patience is another key attribute of good trading, and when you don't have the right mindset, you won't have much of that, either. You give up on good trades too soon and often become hyperactive as you seek immediate gratification.

The best way to cultivate the right mindset is to be very aware of your thinking. Positive affirmations and self-talk may seem trite or silly, but they can go a long way in helping you maintain the right attitude.

Another important element of developing trading confidence is to be around people who think positively. That doesn't mean hanging with the perma-bulls who are always wishing and hoping that the market will go straight up. It means being around traders who enjoy success on a regular basis and feel confident that they can handle whatever the market throws at them.

If you want to increase your trading success, the secret is inside your head. Develop the right attitude and the trades will come