Your Beliefs About Trading

By Van K. Tharp, Ph.D.

You do not trade the marketsóno one does.  Now that might sound surprising to many of you.  But what you really trade are your beliefs about the market.  Furthermore, your ability to do so is tempered by your beliefs about yourself.

Iíd like you to write down your beliefs about yourself.  These beliefs will typically start with words like 

  • I am
  • I feel
  • I experience myself as

Now if this sort of exercise is new to you, when you first do it, youíll probably write down a bunch of your positive attributes.  Furthermore, youíll probably have trouble writing down more than twenty or thirty such beliefs.  But you probably have hundreds.

However start your list.  Letís say you think for about five minutes and you come up with the following items:

  • I am a fairly good trader.
  • I feel positive about my potential.
  • I like myself.
  • I am fairly astute in thinking about the markets.
  • I am intelligent.
  • I am creative.

You know there are a lot more, but after 15-20 minutes of thought thatís all you can come up with.  Okay, thatís a start.  But now Iíd like you to continue the exercise each time you make a trade, either opening the position or closing it.

Letís say itís Monday morning and you open positions in the market.  After doing so you continue to assess yourself and you notice two things:

  • Iím feeling really excited.
  • I like fast moving stocks.

Okay youíve gained some insight about yourself.

By mid afternoon the market is in a steep decline and three of your stocks are down $500 on the day.  Now you start thinking to yourself:

  • I feel angry about that position.  I just got in and itís going against me.
  • Iím not going to let them take advantage of me this time.  Iíll hang on until it comes back.

Notice that youíve just gathered some more insights about yourself.  Keep this up until youíve written down 100 or more statements that reflect you and your feelings.  When you do, youíll have a lot more insight about how you produce your trading results.  And you will be starting on your way to becoming a peak performance trader.


About the Author: Trading Coach Dr. Van K. Tharp, is widely recognized for his best-selling book Trade Your Way to Financial Freedom and his classic Peak Performance Home Study Program for traders and investors. Visit him at for a FREE trading game or to sign up for his free weekly newsletter. 




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Last revised: August 04, 2011