While trading the markets, there are times when Murphy’s Law says it all: “Whatever can go wrong, will go wrong.” Does this sound a little too cynical? Perhaps, but only if you submit to pessimism. If you have a winning attitude, however, you’re ready to tackle anything. You’ll think, “Things go wrong all the time. So what, I’ll take it in stride and move on.” If you cultivate a winning attitude, you can fight Murphy’s Law with ease.
In their book, “The Inner Game of Trading,” Robert Koppel and Howard Abell argue that trading knowledge is not sufficient to trade successfully. Sure, it’s essential to have extensive knowledge and a wealth of experience with the markets, but trading with a winning state of mind is also necessary. Traders with a winning state of mind are anxiety-free, confident, organized, and have high self-esteem. Many traders, though, unnecessarily limit themselves. They aren’t confident, but uncertain and easily shaken. They are vengeful, rather than enthusiastic about vast market opportunities. They are easily disappointed and find it hard to get energized. And they face an adverse market event with frustration, instead of persistence and discipline.
Consider the difference between the limited trader with a pessimistic attitude and the resourceful trader with a winning attitude. The limited trader may think, “The markets are rigged, too risky, and don’t let you win.” The resourceful trader, in contrast, thinks, “The markets provide opportunity, and can be mastered.” The resourceful trader realizes that he or she may not be perfectly skilled. Mistakes are bound to happen.
The limited trader thinks, “If I get stopped out, it illustrates that I’m a loser,” but the resourceful trader thinks, “If I get stopped out, then I have to reevaluate the trade.” While the limited trader thinks, “If the market doesn’t do what I expect it to, then I don’t know anything,” the resourceful trader thinks, “If the market doesn’t do what I expect, then my analysis or timing has to be reconsidered.” While the limited trader allows his or her emotions and feeling of low self-esteem to take over, the resourceful trader takes an active, problem-solving approach and gets things done.
A winning attitude can do wonders. Rather than feel like a victim who has no control over the markets, a winning attitude allows you to gain real control of your thoughts and emotions. Rather than react emotionally to a setback, a winning state of mind allows you to cope with an adverse event effortlessly, and manage risk in order to protect your capital. When you have a winning attitude, setbacks aren’t a threat. You don’t pessimistically blame the markets or market participants for a setback.
Instead, you take responsibility for your actions. You think, “What can I do to make a winning trade? Maybe I can change my method. Perhaps I need to stand aside and study the current market action more closely. I’ll learn from my mistakes and eventually master the markets.” By not putting pressure on yourself to trade with perfection, you feel more relaxed, creative and ready for action. So when setback after setback starts making you feel like Murphy’s Law is true, question its validity, cultivate a winning attitude, take control, and master the markets.