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Balancing Self-belief and reliance on Strategy over hope in Trading

Lesson 2 of 5
Duration 4:50
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Contributed By: Teach the World to Trade

Presenter: Sam from ‘Teach the World to Trade’

Key Concepts:

Self-Belief in Trading:

Essential for success, driving learning, and resilience. Self-belief acts as the “jet fuel” for progress and overcoming challenges.

The Dual Nature of Hope:

Optimism is valuable but should not replace strategy. Relying solely on hope can be risky and counterproductive in trading.

Strategy Over Hope:

The importance of analysis, planning, understanding market dynamics, and recognising hope as a red flag indicates deviation from the trading plan.

Discipline and Blueprint Adherence:

Encourages reassessment when hoping for a trade to recover.

Stresses the importance of cutting losses, learning from experiences, and sticking to the trading plan.

Tips for Avoiding the “Hope Trap”:

  • Regularly review and update the trading plan.
  • Reflect on trades to understand successes and failures.
  • Stay informed about market conditions.
  • Engage in continuous education and learn from the successes and failures of others.
  • Monitor emotions to ensure decisions are based on analysis, not impulses.
  • Recognise when feelings of control slip, indicating a need to realign actions with strategy.

Takeaway Message: Believe in your abilities, but anchor your trading actions in strategic analysis and planning to navigate the markets effectively and sustainably.

Resources

The Power of Belief

Confirmation Bias – the fuel for the wrong type of hope

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Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Teach the World to Trade and is being posted with its permission. The views expressed in this material are solely those of the author and/or Teach the World to Trade and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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