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Confidence is the second virtue that all outstanding traders must possess. Confidence is a belief whose foundation lies in faith. Faith is based on a definite conviction that an ultimate outcome will be achieved. Outstanding traders have faith that they will make a profit over time. They have faith that their methodology will work over the long haul. They are confident because of their faith that they will achieve their ultimate outcome, that their methodology will evolve to the point where it is profitable. Their confidence is also derived from all the research (a reference, and a vehicle) they conducted to develop their methodology. These traders obtained their confidence after they had faith that they would triumph. Granted this is a subtle difference; however, it is a critical difference. |
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When traders have faith that they will triumph, their level of confidence dramatically rises. They can then develop and refine their trading methodology until it is profitable. Their confidence is derived from their references about their own abilities and the abilities of others. |
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Many novice traders have faith in the computer program they purchased or the newsletter they are subscribing to. This faith then gives them confidence based upon their reference about the validity of the program or newsletter, which depends on how successfully the marketing department presented the material. Their confidence is based not on their abilities as traders, but on the abilities of the copywriters for the advertisement. The confidence of novice traders is also based on their ego, which convinces them that the computer program or newsletter is worthwhile. This confidence is shattered after they get a margin call or realize that their account is down 50 percent. It is shattered because the feeling of confidence generated by the copywriters has been negated by the reality of the marketplace. When a belief is violated, negative emotions result. The purpose of the advertisements is to generate feelings of faith, by giving us what we believe are valid references. This allows our mind to convince us that our belief of certainty is valid. However, as we learned in the previous chapter, if the feeling of certainty is created or dependent upon the action of others, it is probably the result of an uncontrolled ego. |
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Other new traders are able to see the fallacy in newsletters and prewritten trading programs, and decide to purchase a computer software that allows them to write their own program. By now you know that it is their ego telling them that they can write a program, and become fabulously wealthy from trading it in the next six months. After all, they and they alone have the unique ability to write the winning program! Once again, their confidence is derived from the feeling of certainty generated by their ego. |
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