Trading affirmations put to the test

A couple of weeks ago, I went to cheer on my seven-year-old son in his first cross-country race. I watched him come into the home stretch, splattered in mud, being jostled by significantly bigger seven-year-olds pushing past him.

He could barely put one foot in front of the other.

In fact, he looked close to tears.

But as he heard our cheers of encouragement and saw that he was nearing the finish line, a look of grim determination came over his face, he gritted his teeth and charged to the end of the race.

I don’t know what he told himself in that split second. But it made all the difference between finishing the race, and lying down in the mud crying for his mum.

And it reminded me just how powerful the messages we tell ourselves can be.

Trading affirmations: hippie mumbo jumbo, or worth a try?

I have to admit that I’ve had some serious reservations about using affirmations. I struggle to take this kind of thing seriously.

Do you really expect me to improve my performance by just telling myself to do so?

Well, yes.

Those of you who are regular readers will know that I’m a keen amateur triathlete. And when you’re up to your neck in the North Sea, or cycling into a headwind, telling yourself that you can do it, is a lot more effective than telling yourself that this was a stupid idea, your legs and ache and you want to stop!

We don’t need to dress affirmations up in some spiritual “hippie” guise – they are as simple as giving yourself a psychological pat on the back.

Compare bumping into an old friend on the way to work, who tells you, You look tired … Looks like you’re having a bad day …

To if the same person tells you, You look great! … Looks like life is shining on you …!

Which one will send you off to work with a spring in your step?

And the weird thing is, it doesn’t really matter if you know that you’ve had no sleep and just rolled out of bed looking dreadful – the positive comments still help to give you a boost.

So, now I’m telling you to lie to yourself?

Well, yes.

The thing with affirmations is that we’re trying to give ourselves a “picture” of the way we want to be. So, if you’re a wildly emotional trader, who’s always trying to “get one over” the markets, you might tell yourself …

I accept profits and losses without emotion. I will not trade out of anger, fear, greed or revenge. I do not let emotions sway my trade decisions.

As you say those things, you’ll want to visualize yourself behaving in the way that you want to be.

And these kind of “tricks” we play on ourselves really can and do work.

But, let’s be realistic – no amount of chanting affirmations is going to turn a losing strategy into a winning one! But they can turn a losing trader, who is struggling to follow a strategy with sufficient discipline into a winning trader.

But it’s not some magic solution – trading affirmations are about keeping yourself on the right track and avoiding falling into bad habits. If you use them wisely, they can be a powerful tool. If you think that you can say some affirmations and watch your profits magically increase – you’re in the wrong ashram!

Proving it

Okay, so what I’m going to propose here, is a little Trader’s Bulletin experiment …

Don’t worry, it won’t involve attaching any electrodes to your brain!

I’m going to trade for the coming week, using affirmations, and I’ll report back on whether I see any improvement in my psychological performance.

And I’d like to invite you to do the same and report back what you think.

Below is a list of possible affirmations for you to start with – pick out 10 or more that you feel would be most powerful to you.

You’ll need to say them out loud each day before you start trading (sitting cross-legged on the floor and burning incense is optional). If you’re not used to doing affirmations, you’ll probably feel a bit silly – but bear with it!

Here’s a list to get you started (or feel free to come up with your own) … I look forward to hearing how you get on …

Our trading affirmations

• I am a successful trader.

• I have developed and follow a proven trading system, and realize that one bad trade does not negate the system.

• I am a disciplined trader and will always follow my trading plan.

• I approach trading as a business. I am strategic and logical in following my trading business plan.

• I do not let emotions sway my trade decisions.

• I am equally unemotional about profits or losses. I will not trade emotionally, out of anger, fear, regret, revenge or greed.

• I set profit targets, and take those profits when they are achieved. I do not change targets in an effort to create “just a little more” profit.

• I practise sound risk management principles and will never over-expose myself to the markets.

• I keep a trading journal, and note when and why my analysis failed and succeeded. I review this journal weekly.

• I do not fight the market. I capitalize on whichever direction the market is going.

• I take small losses rather than let them become large losses.

• I don’t have to be correct with every trade.

• I act upon what the market is doing, rather than what I think it “should” be doing.

• I do not try to “outsmart” the market.

• I understand that consistency is more important than being “right.” Having the desire to be “right” is for amateurs and making money consistently is what the real professionals do.

• I see mistakes only as opportunities to observe what I need to improve in my skills and intuition. Therefore mistakes and losses become valuable instead of debilitating.

• I do not trade every day just because I feel as if I have to.

• I am always learning and improving my skills.

If you’ve other affirmations that you’ve found useful, it would be great if you could share them here. And don’t forget to come back to this page and let us know how you get on.