Trading Guides

The Importance Of Self-Talk As A Trader

When trading the markets, a daily exercise that gets overlooked yet it holds undeniable value to increase the optimal performance of a trader, especially intraday, resides in our ability to engage in an honest and coherent dialogue. I would consider an inner dialogue the first stage but even better, explicit chatter out loud with yourself can anchor the perception, conviction, and beliefs we project towards the markets that we trade and positively adjust the feelings we generate.

If you agree that the way you think has a high impact on the way you perform, why wouldn’t you want to put your utmost effort in nurturing your self-talk in such a way that there is constant congruence between your ongoing thoughts and the actions conducive with these ideas and beliefs you hold?

If we achieve this pinnacle of mind vs body control, we can better align the outcomes of our stimulus, which let’s face it, way too often we tend to become our worst enemies, betrayed by the separation between what we are supposed to do and what we ultimately end up doing. The art of controlling emotions, gaining clarity when trading, reinforcing an idea, strengthening one’s profile, starts from being true to ourselves, hence having a constant self-interaction out loud is immensely valuable.

Success in trading the markets relies very heavily upon the ability to refine the quality of the information we, as traders, process out of every data point generated in the chart. It is intuitively strange to have an interaction with ourselves. Partly, it has to do with the way we’ve been conditioned by society. If you were to talk to yourself out loud in a public place, the immediate reaction from bypassers would be to judge it as odd behavior. You just have to realize that in trading, the majority of preconceived notions we’ve been taught are tued upside down, including the one that self-talk has negative connotations. The absolute opposite is true.

Becoming a broadcaster of your own trading reinforces the way you think about your trading. The goal should be to enhance your conscious exposure and coherence so that your actions become a manifestation of your thoughts in order to yield obvious improvements through enhancing trading awareness.

By having this dialogue with yourself, you are setting up a framework for analyzing market information. It is your own persona that acts as a constant feedback-loop to choose a suitable response – stay away from a sub-optimal trade, don’t let emotions overrule your plan, etc -. Changing your dialogue will ultimately make your profile and character as a trader more robust, underpinned by the notion that the constant evaluation of your actions leads to consistency in your behavior.

I will now break down the areas where I believe the most benefits can be observed:

Clarity: If we are talking to ourselves, we enter a state of increased focus on the task at hand, which leads to more revelations, identifying areas of inconsistency or red flags before making that typical mistake from which we would regret in hindsight. Broadcasting our own trading, as if we were the official commentators of a football game, allows seeing the playing field from a more objective approach, while it makes us sharper in perfecting our craft, refining the concepts our trading is built upon and grow our knowledge by active observation and deliberate purpose.

Trade-Ideas: The more eloquent we sound in our self-talk, the more chances to generate new trade ideas and be decisive in trading them as opposed to being lethargic, risking to rest on the laurels by shutting off from how one perceives and creates chronicles of the market. Imagine that you share the scenario you’ve planned for the day with a fellow trader, talking about it, getting follow up questions that require your concrete answers. Then replace that trader and see yourself actively talking to yourself about the scenarios X, Y, Z and how you’ll act in every instance. Then throw feeling into the mix, in other words, attach real sentiment behind your thoughts and plans. By doing that, the generation of ideas and how you will be acting upon each scenario becomes clearer, which carries plenty of benefits such as removing hesitation, increasing conviction, etc…

Conviction: By telegraphing your thoughts out loud, you achieve a higher level of vibration in your body while being more in tune with the real-time action, which leads to an optimal state of readiness when the stars align and one must pull the trigger. As I outlined above, this will lead to reducing the hesitation and increasing the conviction regardless of the outcome. Since you are literally talking to yourself as the market information unfolds before your eyes, you can reinforce the communion between what’s going through your mind and whether or not your physical response is congruent. Essentially, you become a well-oiled machine that constantly re-evaluates if the body response is in agreement with the words that you are telling yourself. You weigh up the costs and benefits much faster.

Self-Discovery: Having a self-dialogue illuminates your path towards the trading style that best suits your personality and the sound trading behavior that most resonates with who you are as a trader. This is achieved through the constant repetition and analysis of the markets in such a unique way, one that allows multiplying the feedback loop exponentially. Not engaging in dialogue when trading is a missed opportunity to get to know the trader within you even better.

Minimize Mistakes: If you were to ask me what’s one of the number 1 factors that if you were to remove from a trader, it would improve the PNL dramatically, I’d say hands down to minimize the number of mistakes. Even if in hindsight it definitely becomes too obvious, telling yourself, how could I fall for this one again? which leads to disappointment and regret as to why did one make the same error again, you have to realize that if you trade intraday, it is a whole different ballgame as decisions and adaptation to new scenarios must be conducted within minutes if not seconds at times. I recently wrote an article about the lessons you lea after years of intraday trading. The amount of mistakes you can save by just simply aligning what you tell yourself before clicking the button is priceless, as it acts as a circuit breaker of sorts. You are adding another layer of robustness in your methodology to trade the markets by opening up a truly coherent, and honest conversation, away from impulsivity-led spurs. At the end of the day, trading jouals are a form of dialogue with ourselves with the not so ideal subtlety that it occurs in hindsight. But by self-talk, we are somehow frontrunning unnecessary mistakes that get registered in our joual by spotting them in real-time.

Enter in the Zone: Someone is ‘in the zone’ whenever is in a mental state that enables to perform to the best of one’s ability. Talking the markets you trade over with yourself helps you to stay not only consistent in your actions but these become coherent with your thinking, which leads to greater amounts of confidence flows that naturally emanate from such a state. You are engaged on the task more responsibly, and pressure becomes more manageable as the dialogue assist you in mitigating the effects of impulsiveness and negative emotions by cultivating a calm, measured approach to the markets.

What are you waiting for? Start practicing self-talk when trading the markets from today. Give it a shot. I then encourage you to share your experiences in our Discrd room (invite: ) as I have no doubt there are so many positives you can get out of it. The beauty of this practice lies in the simplicity of the method. You just need to get started. Over time, you’ll notice the speed and quality of your self-talk will improve to such an extent that your thoughts can easily be adjusted and find, like water streaming down a mountain slope, the best course of action to accommodate the processing of information as you trade.