How do you talk to yourself?
All of us coach ourselves via self-talk? What kind of coach are you?
I recently placed a trade looking for a market bounce. The bounce was feeble and we began to sell off. I said to myself, "If the bulls are going to be in control, this shouldn't be happening." I quickly hit out of my position and reversed it. The small loss on the long position was more than exceeded by the gain on the sale.
The trade was only possible because I had rehearsed an alternate scenario during my preparation of what to do if the market could not hold key upside levels. Through that alternate scenario, I was able to react to the market weakness without shock or surprise. It didn't even feel like a losing trade. It felt like, "OK, it's time for Scenario B."
Notice that the self-talk was not about being wrong. It was not frustrated; it was not discouraged. A well-thought out trade that doesn't work can provide useful information. It's tuition for some useful learning.
So it is throughout life. It's always important to have a Scenario B, and view setbacks as learning lessons. That means taking the ego out of the trade and viewing everything as information. It isn't about positive thinking or negative thinking. It's recognizing that it's not about you. It's amazing how we can trade with peace of mind when we are market focused and not self-focused.
Further Reading:
Posts
