While you can't control how the market will behave once you place a trade, there are many aspects of your mindset that you can control.
When you go through a trading slump, do you ever find yourself blaming something outside yourself? One of my favorites used to be blaming "the system" - the system is rigged against me: the brokers are the only ones getting rich, the market makers are killing me on these bid/asked spreads, the guys getting in pre-IPO are getting the best prices, etc. When you blame an external situation, you are giving up control, and instead letting yourself be controlled by outside events. This converts you from a proactive trader into a reactive trader. If you are reacting after the fact in the markets, you are in turn letting your emotions start to rule you, instead of planning how you will react to any set of circumstances. You know how letting emotions control you turns out in the markets -- badly.
Justifications and excuses are the hallmark of traders who consistently lose. Excuses seek to diminish the trader's responsibility for a losing trade, creating what psychologists call an "External Locus of Control." This means that the trader believes he is acted upon by events beyond his control. In comparison, a trader with a strong Internal Locus of Control believes he is responsible for every reaction that happens to each action he takes. When the trader feels external circumstances control his results, he will not tend to set goals (why should he? - the market will create the result for him), and the controlled trader will not apply as much effort to prepare or trade. This makes it neary impossible for a trader to build self-confidence. How can you believe that your actions will succeed when events are totally out of your control?
Great traders take total responsibility for each action they take. They do not carelessly take actions to buy or sell. Such impulsive moves can destroy the trader's confidence. The successful trader knows that every action taken will produce a reaction, and actions taken with the probabilities on the trader's side will increase the odds of favorable reactions over time. You must believe that you control your own destiny. If you are not getting the results you expect of yourself, look inside yourself. Stat analyzing your actions and behaviors: are you hanging on to losers too long? Are you cutting profits too soon? Are you not able to pull the trigger and then you watch helplessly as the stock roars on without you? These or other frustrations should clue you in that you need to fix some element of your trading plan, and you should make decisions and act immediately to find a proactive solution after evaluating your situation.
Price Headley is the founder and chief analyst of BigTrends.com.