Sometimes traders talk to themselves in downright rude and demeaning ways. They'd be shocked if anybody else spoke such words to them. But self talk sticks, and since we are the authorities on ourselves, our self talk carries weight.
Because of all the dangers, and losses, and failures endemic to trading, it's very easy to fall into negative self talk. Self talk is simply the running dialogue we have with ourselves. We do it all the time. It's verbal thought. We may not always be conscious of it, but we're doing it.
How do you talk to yourself when you trade? Now some of you may be saying, "Talk to myself? I don't talk to myself." But of course you do. You're talking to yourself when you say that. That's one of the ways we think. We think in words (and sounds and pictures and feelings). But most precisely we think in words; ergo, we talk to ourselves.
Traders often speak to themselves in negative ways that they would never let another person speak to them. They call themselves idiots, failures, fools, losers, and so forth. Their purpose in doing this might be to motivate themselves to better behavior, but self denigration rarely produces good results. Have you ever noticed that the more you scold yourself, the more you reproduce the behavior? That's why I tell my clients not to speak harshly to themselves.
Of course, not all self talk is negative. Some absolutely supports you in your purpose. All self talk directs focus, and, therefore, impacts trading.
When you see a signal to enter the market, what do you say? Do you say, "What if I lose?" "What if I'm wrong?" I guarantee you if you have trouble pulling the trigger, you're saying something similar to that.
Very often the first thing we think about is where to put our stops. You might ask, "What is my risk?" This is better than "What if I lose?" However, it still takes our thoughts to risk rather than reward. If you're hesitating when you should be entering the market, you could say something like, "How much can I make? or, "What if this trade is a big winner?"
Of course, not everybody hesitates to enter a trade: some jump the gun and some over trade. These people are anticipating large profits. If you hear yourself saying, "This is going to be a big move!" or "This is going to the moon!", you'll need to activate caution. Remember, gamblers often think they've got a sure thing. When you hear yourself talking like this, it would be wise to ask yourself, "What is my risk?" and "What would have to happen to show me I'm wrong?"
Our self talk reveals our biases. If you're talking up your trade or talking it down, you have a good clue that you've lost your neutrality. In such an instance it would be advisable to ask yourself, "What is the market showing me now? What does the market want? What do I know for certain?"
If you hear yourself saying, "I don't believe this!", look out. You're warning yourself that you're not taking the market action at its face value, an extremely dangerous thing to do.
Start writing down the words you say at critical junctures in your trading. You'll begin to understand where your thinking is helpful and harmful, and you'll be able to change the direction of your thoughts by shifting your words. My website has an article outlining powerful questions to use when you trade.
What if you could learn to direct your thoughts in such a way that they truly support your success in trading?
Create a free website at Webs.com