The power of positivity with Louise Bedford

If you’re a trader, everything can seem like a threat.

Threats, real or perceived, are entrenched into the very fabric of being a trader.

Your results can vary signficantly, seemingly at random.

That iron-clad rule that you thought covered every scenario doesn’t cover that new event currently playing out on your computer screen. So now what?

When problems start to seep into our usual trading routines – it can take the pleasure out of the pursuit of trading excellence. When this happens, the savviest traders have a secret weapon. It’s called ‘seeking help!’

Consider this quote from acclaimed Japanese author, Haruki Murakami, "And once the storm is over, you won’t remember how you made it through, how you managed to survive. You won’t even be sure whether the storm is really over. If you’re in the eye of the hurricane, waiting for your world to crash down, just know a multitude of other successful traders have been there before you and moved beyond it. They’ve been through the tumultuous winds that seem like they want to sweep your very essence away, and they survived to trade another day. So many successful traders know what it’s like to want this trading ‘thing’ so badly it hurts.

So, how do you start to downregulate your emotions when everything seems so threatening? Well, here are some effective techniques you can use to be less impacted by the storm:

Begin by looking at your own self-talk

What you say to yourself can make a huge difference to the way you perceive threat. And let’s face it… the markets are full of perceived threats.

A study by Harber et al in 2011 looked at the perception of threats in detail. These researchers took a live tarantula, plus a number of study subjects, and placed them in proximity to each other. The perceived closeness of the spider to the study subjects was then recorded. The researchers found that ‘the more self-worth that participants experienced, the less close the tarantula appeared to them.’¹

So, how you feel about yourself can make a big difference about how threatening you find a situation. If you have high self-worth, it can help you detach from seeing a threat as particularly close to you or even malicious.

The good news is that it has been found you can impact your self-worth by using a few different methods. A key way is using self-affirmations. Research has found you can use these to gain detachment from threats, so you can develop objectivity². In the markets, objectivity is king, so anything you can do to assist in this area will help you make better trading decisions.

Use Affirmations

Self-belief sets the professionals apart in every endeavour. If you weren’t lucky enough to be born with a high belief in your own abilities, there are still ways that you can cultivate this enviable quality. Using affirmations can guide you toward your goals.

An affirmation is a short, positive, powerful statement you repeat to yourself on a consistent basis. Many of our actions are guided by our self-talk and our subconscious. The conversations that we have with ourselves in our minds can either encourage or discourage success habits in the financial markets. Affirmations can help to block out those nagging voices that sometimes tell us we’re destined for failure, and substitute positive thoughts in their place.

According to many professional psychologists, affirmations can reprogram our subconscious patterns and lead to a higher level of success in any field.

Here are some guidelines for setting affirmations. If you have already written some of your affirmations down in the past, you may wish to alter just a few of the words to have them gain more impact using these guidelines.

Step by Step Guide

1. Have a specific goal in mind.

2. Write it down once a day, 15 times in a row, using this type of format for at least one week:

"I, (insert your name here), have achieved/done/accomplished whatever the goal is."

"I, (insert your name here), am an exceptional trader. I follow my trading plan every time I trade".

You could also emotionalise the statement and speak about the goal as if it has already happened. The more emotional you can make it, the more vivid the impact on your subconscious. For example:

"It feels great to have achieved... (insert goal here)."

"Every time my stop is hit, I exit the position calmly and decisively"

Put these affirmations in the past tense, as if you’ve already achieved it.

3. If your goal has an artificial time frame imposed, make sure that you are being realistic with your desires. For example, winning the next 400 metres Olympic freestyle event is hardly practical if you can hardly dog paddle.

4. Don't state that you 'want' something to happen (your subconscious already knows this), or that you will 'try' - as you're already trying. Make the statement concrete and positive.

5. Write down your affirmations on flashcards and stick them up on your mirror or carry them with you to read while you wait for appointments. Combine reading the affirmation with an everyday routine, such as cleaning your teeth. If you find that you're no longer reading the cards after a few weeks, re-write them onto different coloured cards. Alternatively, you could add some new ones, or alter the others slightly, to keep your interest in the task.

Stretch yourself with these affirmations, but not to the point that you can't believe that it's possible for you to achieve it. One of the things with affirmations is that if you don't really believe them in your core within a few days, it means you're aiming too high. However, if you can take that visualisation and pad it out with touch, taste, sight and smell - then you're on the right track.

Many traders have used this exact method to turn their trading results around. One said: “I have found my affirmations are really helping here as it makes me focus on discipline every day.”

Be careful about negative or vague terms

Change: “I aspire to never violate these principles of success”

To: “I always follow these principles of success”

Think carefully about some practical affirmations that you can use to develop your own trading skills.

A practical exercise is to write down at least one key affirmation that will guide your trading development. Make sure you keep them in present tense, and take out the meta-language (e.g. kinda, sorta, more or less,) as these little words lessen the impact of your statement.

Changing your statements to present tense is very powerful. The subconscious mind doesn't 'get' the future. It only 'gets' now. The more you can make it as if it's happening now, the better.

But what’s the catch?

Is there some fine print somewhere?

Keep in mind that this is one of the areas that responds to consistency. Research suggests that affirmations are the most relevant and effective if you use them before you end up in real trouble³. They act as a method of insulation, so that if the proverbial hits the fan, you’ll have the internal resources to cope. Part of the psychological fitness pillar of ‘recovery’ involves pre-planning, and helps you stay on top of your game.

Admittedly, these methods aren’t a ‘quick fix’, but as with so much regarding high performance, it is a game for adults. It requires sustained effort over the long term to reap the rewards.

Once you feel you have come up with some affirmations you feel confident with, re-read this article and double check your affirmations against the guidelines I have laid out.

Louise Bedford is a full-time private trader and author of The Secret of Writing Options, The Secret of Candlestick Charting, Charting Secrets, Trading Secrets and Let The Trade Wins Flow.

Sources

^1. Harber, K. D., et al (2011). Psychosocial resources, threat, and the perception of distance and height: Support for the resources and perception model.
^2. Sherman, D.K. (2013), Self-Affirmation: Understanding the Effects
^3. Critcher, C. R., et al (2010). When Self-Affirmations Reduce Defensiveness: Timing Is Key.