Traders who want to achieve their goals will have to overcome a mental block in order to become successful. A common occurrence that holds back many traders who want to become profitable traders is that they have a fear of failure or a failure mindset. This negative fear or "fear" of failure and failure mindset can be described as an over confidence.
Here are a few characteristics of over confidence:
1. Over confidence causes traders to place a lot of pressure on themselves.
It causes traders to feel they must be right about their trading systems. This, in turn, creates pressure to perform as they "want to be successful".
Traders who have this over confidence view of themselves as "right" causes pressure to perform because they become emotionally attached to their positions. This causes the trader to become preoccupied with the task at hand, not allowing time to think clearly.
2. Over confidence results in a lack of self awareness.
With this over confidence view of yourself as right, the trader becomes unaware of their own thinking and decision process, thinking they have a crystal ball.
With an over confidence mindset you think you have a "magical" trading system. You become unaware of the emotional distortions and habitual ways of thinking that cause your decisions to be influenced by self talk and what you think is correct.
3. Over-confidence causes lack of humility.
With an over confidence mindset you think you are better than average and that everyone else should be like you. This cause you to feel that you don't matter. If you have an over confidence mindset then this causes you to be unaware that your self esteem is linked to your performance and self-belief. This causes a lack of humility. Humility is a key to success. Your pride of performance causes your performance to be lower.
With over confidence you will be very reluctant to take a loss, thinking that it is just too difficult to believe that your system will perform as it should. This attitude causes you to place a lot of pressure on yourself to perform. This pressure of performance causes the impulsive trading behaviors and poor money management.
If you can overcome your fear of failure and over confidence then you can set yourself on the path to trading success. Over confidence is the antithesis of trading success. It is also the road to a lot of loss and frustration. With a new awareness and a willingness to look at the problem from different angles, you can begin to see how your fear of failure and over confidence are leading you down a path to trading failure. With this new view you can take the first step to overcoming your fear of failure and over confidence.