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Trading Psychology Posted by Team Topstep May 21, 2023

Power of Positivity

Possible - Positive

Power of Positivity

I was reading a story I came across on social media that some of you might have also seen. The short version is that over time, a trader was able to determine that his losing weeks in the markets immediately followed occasional weekend visits from a particular family member who had an influence on his power of positivity. This pattern became traceable and detectable for this trader when tracking his progress over a large enough sample time period. 

It’s understandable that having a routine disrupted or guests in your living space can easily cause a variety of mental distractions. However, for this trader, the main reason for his losses was not too challenging to isolate—namely, he surrounded himself with some significantly negative people. The takeaway is that when he was immersed in an environment of negativity, he experienced a subconscious response that affected his mental outlook. 

My readers over the last few years might recall that I often assert that every trader should keep a journal, enabling them to chronicle patterns in their mental and emotional states, trading habits, and other relevant factors. This story illustrates why being able to inventory yourself and your surroundings is integral to success and sustainability within this business. 

Negative people can be sadly overbearing at times and affect our own power of positivity. This is particularly true when they are overly critical of themselves, or even worse, of others. Nevertheless, negativity has a way of transforming the mood of a productive and healthy environment and substitutes irritability and unsettledness for joy and contentment. 

Disadvantages of a Negative Environment

It’s likely that you don’t need me to further describe the features and characteristics of negativity. However, as traders, we should be more sensitive to how these psycho-emotional issues tend to affect our trading. Therefore, this article will consider some of the trading disadvantages of a negative environment, as well as some methods to sharpen your own positivity. 

Trained for Failure

The power of negative thinking has many harmful effects. One of the clearest in the life of a trader is that it trains us to expect the worst outcome. I’ve seen those who traded expecting to fail, and I couldn’t help but ask why one would even try at that point. Some of these had turned into negativity junkies who nevertheless still traded because it was a habit. 

Therefore, not unlike someone who abuses substances, these traders had some awareness that they were doing something harmful to themselves, but they just didn’t seem to be concerned about their self-neglect. This is a very doom-and-gloom way of thinking, which feeds into the second point. 

Self-Fulfilling Prophecy

I frequently say that it’s much easier to be a historian than it is a prophet. However, those who forecast negativity often find what they are looking for. The causation is a series of negative habits that form while someone is in a negative frame of mind. Sometimes, we aren’t even aware that we are dooming ourselves; but the reality is the more negative we are, the worse decisions we will make.

This most definitely applies to the trader. A negative disposition will prompt a series of actions and trading decisions that incur self-harm. I’ve observed this time and again. In fact, I’ve seen traders take enormous falls in terms of their trading capital during periods of personal, mental, and emotional negativity in their lives. 

Stealing From Yourself

Another disadvantage to a lack of power of positivity is not only the potential reduction of your trading revenue but also that when you have times of success, you don’t embrace them or your positive characteristics readily. This makes not only your losing trades miserable, but also your winning trades. 

I’ve been observing traders for over a decade and a half and know that the traders who stress out over their winners aren’t the kind that you see maintaining the trading lifestyle year after year. Eventually, they are susceptible to burnout even if they don’t flame out of their account. 

We Become Less Likable

Not only does negativity possibly reduce our profit and likely reduce our joy of success, but it also makes us less likable, or in many cases, nearly unlikeable. As a result, not only is our credibility harmed, but our social lives may also be damaged, and it becomes more challenging to keep the right people around us to offer support. 

4 Ways To Help You Think Positively

So, now that we have examined four brief but crucial ways that negativity puts a damper on us as traders, let’s take a look at four ways to not only think positively but also to do the things that enable you to be a positive person. 

Start Your Day Right

The best way to be successful is to build positive momentum throughout the day. For example, when you select a responsible routine of going to bed and waking up, then you’ve made your first choice that impacts your day. Then, you can complement this good choice with something that benefits your body, like exercise and healthy food, and already you’ve made fulfilling decisions that increase your general positivity. 

Establishing a good routine keeps you grounded and feeling secure. This is not an automatic solution, but I can assure you that doing otherwise only increases negativity. Good behavior starts with your first two or three decisions of the day, which build traction for everything else you do.

Positive Reinforcement

One way to view positive reinforcement is through the actions of the previous step. However, a positive outlook also transfers from our verbal habits. Believe it or not, the more our ears hear our lips speak positively, the more our minds will be programmed to accept that disposition. This is why throughout the day when we find ourselves thinking negatively, we should say something positive, increasing our power of positivity. Over time, this will lead to a more positive trajectory.

Prepare Confidently

Positivity requires varied forms of work. If traders are going to be successful, they have to be prepared. With preparation comes confidence, elevated expectations, and a general feeling of positivity. On the flip side, if you are unprepared for the trading day, tuning in to your computers late or not being ready with your charts, or whatever it might be, then there is a greater likelihood of you feeling displaced and negative. 

Keep Your Orbit Healthy

What things do you allow to influence you? Over the years, many traders will graduate from having the TV on at high volume during the day, tuned to one of the popular financial news stations, to turning it off altogether or at least muting it. We know that negativity gets, especially in the news cycle, which most days would be otherwise stale and redundant without the media inflating a situation into a crisis. I have personally witnessed too many traders become negative due to the influence of the news and other sources. 

One of the ways to secure a more positive disposition is to entertain a healthy orbit of influencersvoices of reason who aren’t trying to sell any point of view but are geared toward objectivity. Furthermore, it’s important to surround yourself with positive people, especially winners who have benefited from a glass-half-full point of view and whose success has produced additional positive attributes.

In conclusion, we all need a little inspiration from time to time. My hope is that this article serves to help us all in pursuing a positive outlook in trading as well as life. So, make the most of yourself and your trading, and look for success. Until next time, trade well!