Where does your trading confidence come from? Which type of confidence do you use for trading? Click here or in the video below to determine where it does come from and some considerations of where you might want it to come from to improve your trading performance!
There are two primary types of confidence. They are external confidence and self-confidence.
External confidence is where we create a feeling of confidence based on evidence from outside ourselves or from past experience such as I’m confident the sun will rise tomorrow because it’s happened every day of my life or I’m confident I can drive a car because I’ve driven successfully, or mostly successfully, for the last 20 years.
Self-confidence is where we place trust in our own abilities and resilience. With this type of confidence we understand things may go wrong or we may make a wrong decision and we may experience poor outcomes however we also know that when those poor outcomes happen we know we can handle them.
The emotions of disappointment and failure we know we can handle and still be OK. We know that if we experience any setback, we will be kind and trust ourselves to learn from the experience, and try again in the future.
It is natural to have failures. Especially when were try to improve ourselves or trying something new therefore we know we will fail but we’re not afraid to fail.
And since we can’t handle a loss, we are going to need nearly 100% certainty the loss won’t happen.
Therefore, we attempt to create this certainty in multiple ways that are detrimental to becoming successful as a trader.
It is important to learn where your trading confidence comes from so that you can intelligently decide where you want it to come from!