To be a successful trader you have to have good technical skills and sound money management skills. Also, though, you have to have a positive psychological outlook to give you the mental and emotional balance to be successful.

One of the most important discoveries of the twentieth century psychology was the discovery of the “self-concept”. The self-concept is the master program of one’s life. It is the bundle of beliefs that you hold about yourself and the world at large. If determines your reality in that you always see the world through a screen of prejudices formed by your belief structure. It is the belief structure that predicts your performance and behavior in every area of your life.

You always act in a manner consistent with your self-concept, consistent with the bundle of beliefs that you have acquired from infancy onward. If you change one of your beliefs at a subconscious level you change your reality.

It is common in trading that two traders given a winning system to trade will often not get the same results. One trader may hesitate and/or hang on to a trade too long or exit before the system will give a exit signal. The other trader may execute the system perfectly and even if he has a few losing trades is able to take it in stride because he can “see” himself trading successfully and “believe” in himself that he will be successful.

Ed Seykota, one of the world’s greatest traders, observed a trader that would self-destruct after building his trading capital up to $250,000. What do think his self-concept was revealing about himself? Maybe he had a fear of success? Maybe that he couldn’t get his family’s attention and love without a tragedy? Maybe he couldn’t see himself with that much money and making dumb trades and losing it was his way of not dealing with it? This is common with winners of the lotteries. Winners often blow their money within a few years because they can’t see themselves as rich on a deep fundamental level.

Fortunately, a person can change their self-concept to be self-empowering instead of self-limiting.

There is a direct relationship between how well you do anything and your self-concept in that area of your life. You perform as well as you believe yourself to be in whatever you do. You can never be better or different on the outside than you believe yourself to be on the inside.

Whenever you feel good about yourself and are doing well at your job, or in your relationships, or at a sport, you are demonstrating a positive self-concept in that area.

Whenever you do poorly or feel inferior or clumsy, or behave badly in some situation, your negative beliefs about yourself are being demonstrated in your behavior.

What makes change positive change possible is largely subjective, not objective. Whatever negative beliefs you hold in your self-concept are largely false but if accepted subconsciously can be very self-limiting nonetheless.

As soon as you begin to identify, question, and reject self-limiting beliefs and replace them with new self-liberating beliefs, your old beliefs lose their power over you and you true potential become limitless.