How Your Trading Plan Boosts Self-Esteem

Trading can be hell on self-esteem. At some point, the reason it’s killing your self-esteem is that you are not following the plan you put together. If you want to keep your sanity, stick to the plan. Self-esteem is built by following plans. If you want to gain muscle or learn a language, you can follow a plan, and if you consistently stick to it, you will achieve your goal. Self-loathing is created when we fail to follow a plan.

In trading, eventually, you develop a reasonable plan and the ability to implement it. Buying in a certain area, under specific conditions, and holding and managing that position until it reaches a target—that is the heart of all trading plans. Everything you do that falls outside the plan or interferes with it is likely a tax on your self-esteem. Overtrading or selling early are not part of your plan, and they are ego busters. No one has a plan to overtrade.

If you take the time to clarify your plan and then actually execute it with consistency and discipline, at least you will know if the plan has merit. Even if your plan fails, you have shown yourself the ability to follow a plan—and the ability to do that is rare. Following your trading plan is a key skill. Every trader who has achieved significant success has done so through creating and following a plan. Every time you don’t follow your plan, you are taxing your self-esteem.