You may not even realize it, but you trade in accordance with your own belief system. And, if you are not successful, it is because you are trading with a system that is not in alignment with your unique beliefs about the markets. Also, some of your beliefs may not be valid for use in the markets. Let me explain.

A belief system is a set of sometimes conscious and sometimes unconscious rules we have about life, trading, money, relationships, etc., etc. Beliefs shape how we see or interpret reality.

We all have a unique set of beliefs that makes up our belief system. Our upbringing, our environment, life experiences, and so forth, all come together to form this belief system. So, we can say that, basically, our personality is shaped by our belief system. In fact, just about everything we do is shaped in some way by our belief system.

Great traders are those traders who can accept who they are, thus accepting their beliefs, both positive and negative. Because, once you accept yourself as you are, you also accept responsibility for yourself and your positive and negative beliefs. You realize your shortcomings and your strengths. This can help you determine how to trade the markets successfully.

Thus, by "accepting" yourself, you can actually help your trading by aligning both your positive and negative beliefs with, not only your trading system, but the markets themselves.

Let's say, for example, that you do not like to go with the crowd; you are a loner in life, and you do not like authority figures, corporate environments, etc. In other words, you have a belief that going with the crowd is not your style. (You may not even know the reasons for this, but, if you dig deep enough, I am sure you can find out why you believe this way.)

At any rate, if this is your belief, do you think you will be a good trend trader? Do you think you will want to trade with the trend and go with the crowd of traders trading with this trend? I doubt it! Because your beliefs are in direct conflict with going with the crowd, so to speak. And, in the markets, that would mean trading with the trend.

Thus, as a trader, if you are using a trend-following trading system, you are trading in direct conflict with your beliefs. And, success will be highly unlikely. In fact, you will probably fight a trending market the entire way! And, chances are, you will not be successful and feel as though, once again, you are the victim of the masses!

Now, let's see how to approach the market by aligning that same belief with the markets and achieving a successful outcome. Step one is to accept yourself for having that belief to begin with.

Once you accept your beliefs, the next thing to do is to find a set of trading entries or a trading system that satisfies those beliefs. For this type of belief system, that would be to find trades that allow you a low-risk entry to counter-trend-trade the trends or use corrections in the trend to get good, unique entries that take advantage of other traders, who represent the crowd, so to speak. That way, you are not trading with the crowd but trading against the crowd (counter-trend-trading) or taking advantage of the trend (crowd) by getting in at a better price in relationship to the other traders.

The point here is to find a way for your trading entries to satisfy your beliefs, thus aligning your beliefs with the markets! If you can do this successfully, you won't need to change your beliefs!

However, there are times when you may want to change your beliefs and times when it is best to try and do that. This will be a personal decision that only you can make. A quick example of this is one from my own trading:

For the longest time, I struggled to keep myself from getting out of trades too soon. Technically, I would make great entries and set well-defined stops, but it was hard for me to stay with trades for a long enough time to see big money. I finally overcame this by confronting reality and being brutally honest with myself about my beliefs.

The problem was not with my abilities or technical evaluations; it was with my emotions structured by my belief system. In fact, my technical analysis was usually right on the mark. But, time and time again, I would get out too soon because my emotions and anxiety took over and literally forced me out of the trade, so I could take a quick profit. I wanted to take that quick profit emotionally before the market reversed and took it away from me.

I had to change my beliefs about money, fear and how the markets work. When trending, markets usually correct, and then trend, correct again, and then trend again. So, I had to change my beliefs about the market to accept this. And, also change my beliefs about taking a quick profit versus letting the market give me all it wants to before the trend ends.

Of course, intertwined with my unrealistic beliefs about the market, was the fear of losing money, etc., etc., etc.! Well, that was a belief that I wanted to change and worked on it until I did! It was a slow process and, even today, I sometimes get the urge to take a quick profit, but, instead of doing that, I will wait for the market to tell me when to exit my profitable trades. Now, I make sure that I do not trade on an emotional level.

If you find yourself trading based on your emotions, you need to stop trading and get some help. So, take some time, get to know yourself and your beliefs (both negative and positive), accept them and own them. Then, decide on which ones to change and which ones to align with the markets. I think you will experience amazing results just as I did!

Remember that trading systems are nothing more than the "tools" you will use to trade well. So, use trading systems that align your beliefs with the markets. Remember this; "Nothing in life worth doing comes easy or else everyone would be doing it!"

*Reprinted (and modified) with permission from Bennett McDowell