Self-Esteem: A Prerequisite to Winning |
You can't trade the markets with the proper mental edge if you don't have self-esteem. Trading the markets requires a person to be persistent and resilient. People with self-esteem don't question their ability. Despite the number of setbacks they experience, they fully believe that if they work hard enough, success is guaranteed. At their core, their self-esteem is true and unwavering. As noted self-esteem expert Dr. Nathaniel Branden observed, "When we appreciate the true nature of self-esteem, we see that it is not competitive or comparative. It is not about making myself higher by making you lower. It has nothing to do with you. It is the joy of my own being." But the competitive spirit often interferes with people's ability to maintain self-esteem. People compete with others. They compare themselves to others and only feel good when they are winners. Ironically, though, winning traders look inward, live by their own rules, and don't care how anyone else is doing. They humbly go where the markets take them and accept what they get.
How does low self-esteem develop? For many, it comes about from a personal history of defeat. This defeat may be rooted in early childhood experiences for some people and in early adulthood for others. But these early experiences shape how they feel about themselves, and how they feel about themselves is less than fully worthy. People with low self-esteem get into the habit of defining their self-worth in terms of what others think of them. Sure, everyone is a little sensitive to how they are seen by others, but people with low self-esteem care a little too much about what others think. You can imagine how this might happen. A youngster who was criticized for his or her physical experience, awkwardness, social skills, or academic prowess, may feel inadequate and on the lookout for any form of criticism. Such a person is likely to feel easily beaten down when even a minor setback is faced. Throughout the rest of their lives, they feel on edge, as if someone is ready to criticize them. Their sense of security and confidence is easily shaken. They may appear calm and composed at times, and they are to some extent, but only as long as everything goes their way. It's all just an illusion, however. When you look more closely, their self-esteem wavers. It's extremely high to the point of arrogant overconfidence when they are riding the wave of success, but it can plunge to the depths of despair during a major setback. It is a false sense of self-esteem. Unwavering self-esteem, in the end, only comes from mastering various life experiences. Unless you've overcome life's barriers and successfully triumphed over hardship, you will never truly feel you can tackle anything. This is true in life and it is true in trading.
How does one develop or maintain genuine self-esteem? One way is to cultivate personal integrity, according to Dr. Brandon. Personal integrity concerns the consistency between our values and actions. It's important to have clearly defined values, and to make sure that our behavior reflects these values. It's often easier to bow to social pressure, or to do what is expected of us, rather than to look inward to what our values dictate. But when we bow to social pressure, or sell out our values, we pay a big price: We lose some of our self-esteem.
Another key attribute of people who have genuinely high self-esteem is that they live their lives as consciously as possible. They are in tune with their inner values and emotions, and try to keep a strong grip on reality. They are astutely aware of their feelings, emotions, and aspirations. They don't limit their awareness or close off important aspects of themselves. Expanding one's awareness requires complete self-acceptance. Everyone has faults, but people with chronic problems of self-esteem are afraid to face them. They do whatever is possible to avoid facing parts of their experiences that they view as "unacceptable." They distort or deny experiences that don't fall in line with their overly positive (and false) opinions of themselves. When people do this, however, they block out part of their consciousness. They isolate a vital part of their experience, and cannot develop a true and genuine sense of self-esteem.
It's useful to constantly remind yourself that you have personal worth despite how well you are doing in the markets. Tell yourself over and over again, "I don't define my self-worth by my net worth." Winning traders feel good about themselves no matter how much they win or lose. They feel good about themselves because they know deep down that they have value as people. They look inwardly for self-acceptance, and follow their personal values; they don't care what anyone else thinks. If you want to trade the markets with a calm, astute, mental edge, you must develop a genuine sense of self-esteem. By making sure that you live by your own values, and fully accept your limitations, you'll develop a true sense of worth that won't be easily shaken by momentary setbacks or failures.