I wrote this four years ago:

Does your self-esteem rise and fall with your account equity? If so, you’re probably in for some difficult times ahead with your trading. For some traders, a trade is more than a trade, it can represent how successful they are as a person, how much status they feel, etc.  When your self-concept is closely tied to your trading outcomes the result is a yo-yo effect in terms of your self-esteem and your internal state.  And our internal state has a lot to do with how well we trade.

Trading already involves a lot of uncertainty, and tying one’s sense of self-worth to the ups and downs of trading is unnecessarily adding emotional volatility to the picture and is usually not a good idea.

Most traders need to work on being more resilient in the face of disappointment. Trading will always involve disappointments, its part of the territory.  A delicate balance between being fully engaged in the trade with a ‘watchful curiosity’ and without being overly attached to the outcome, is how many successful traders describe their internal state.

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Today, I want to address this from a different angle. I get questions all the time about the use of positive thinking and affirmations.  In essence, positive thinking is necessary, but not sufficient on its own to propel you to the next level in your trading. My clients know that I’m a big proponent of using gratitude as a balance to negative thinking.

Regarding positive thinking,  we do need a positive vision for the future, but all too often positive thinking is in reality rather artificial. When we only focus on the positive we ignore what is holding us back.

My background in sports psychology and performance improvement says that leveraging our strengths (focusing on the positive) as opposed to dwelling on weaknesses gives us a bigger bang for our buck. And that’s true. But ignoring a weakness , especially in trading, is akin to a lack of self-honesty

So, try this and see what happens. When you find yourself steeped in negativity, ask yourself: What is my lesson here? Write out your answer and re-visit it every so often.

My self-paced Advanced Course goes into this in much more detail and has many exercises and techniques, and my 1:1 coaching can take you to a new level even faster. Read what others say about it, 4 out of 5 traders report significant improvement.