• Confidence is of utmost importance to all traders, but the first thing to realize about confidence is
that it is primarily not an issue of psychology, but one of abilities and skills. If you want the highest
level of confidence that can be maintained, then dedicate yourself to improving your market reading abilities and your trading skills. Many traders complain about a lack of confidence when in reality they shouldn’t be confident given their lack of skill and real edge in the market. So once again, it’s about the foundations, and they come first.
• Assuming you’re diligently working on those foundations but you want a way to feel instant confidence during times when it may be low, there are a couple specific techniques that can help you achieve this.
• Technique #1: The Personal Highlight Reel. Just like athletes have highlight reels of their best plays in their sports, you can create your own mental highlight reel of your best trades. To do this simply recall your best trades from the past, close your eyes, and visualize them as if you were making them now. To be most effective, use as many modalities (senses) as you can, so it really feels real to you. But the most important part is to focus on the feeling of confidence evoked at the time you took those trades. Relive it. Feel it as if it’s happening right now. You can stack one trade after another and just visualize how you took it, and fast forward to the exit and the result and feel that feeling of confidence. 1 - 2 minutes is more than enough time to do this, and you can do it each morning and midday. You don’t have to wait for confidence to be down to employ this technique; it will add to any confidence you currently have.
• Different people visualize in different ways, so you may see yourself sitting at your screen taking the trade, or you may just see the screen, or it may feel as if it’s all just a blur of quick images and you just sense it all. There is no correct way to do this. Just go with what works for you.
• Technique #2: Creative Visualization. The unconscious mind cannot differentiate between visualization and reality. That’s why just thinking about something can cause very real reactions in your body and motions. You can use this power to conjure up confidence at will. Simply visualize the day ahead, and visualize making great trades and following your trading plan correctly, and ending up with a great overall result. To do it most effectively, focus on both winning and losing trades and draw confidence not only from results, but from correct trading process. You might want to visualize a winner, followed by a loser, followed by a great winner. And even with the loser, feel confident that you took a good trade and you cut your loss short and you bounced back quickly. This would mimic real life and bring forth more authentic confidence that will be maintained during the trading day. The side benefit of visualizing great execution of your trading plan is that you’ll be more likely to actually achieve this in real trading. If you’ve already seen yourself entering correctly, and holding the trades correctly and sticking through correct process despite emotions (which will
also be felt during visualization) , then you are much more likely to be able to do it in the trading day.
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