Losing confidence in your trading is not necessarily a bad thing. Many times, we lose confidence when we sense that our edge in markets might be eroding. All good traders cycle between periods of high conviction--seeing markets well--and low conviction. The diminished belief in trade ideas can itself be a useful indicator; someone with continuously high confidence is in danger of overconfidence.
Over the years of working with very good traders, I've found that all of them go through periods in which they're out of sync with markets. The really good traders--those who sustain long-term careers--don't fight those dry periods. They use the time to research markets, wait for good ideas, and hang onto their capital.
They realize that the goal is not to trade, but to make money. For them, uncertainty is a powerful motivator, not a performance problem.
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Wednesday, December 23, 2009
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