Longterm Trading success – Beliefs and their meaning

Not everyone has ever heard the term dogma. Yet beliefs influence human actions quite considerably. Our inner attitude is made up of many different beliefs.

You surely know the saying: Faith can move mountains, right?

And as a trader your belief system plays an important role. What you believe in – believe it or not 🙂 – decides about your success or failure in trading.

In this article I will show you what is meant by a belief system and why it is absolutely necessary for you as a trader to be aware of your belief systems. And here is my exclusive Trading Newsletter for real trading beasts.

Beliefs – Your filter of reality

A dogma stands for a conviction. Say: You know that something is the way it is. At least from your perspective, that’s how it presents itself to you. Very important: Your point of view does not have to correspond to an objective truth.

Figure 1 shows schematically how our belief system is built up. Belief systems of the lowest levels can only be changed with a lot of effort. They stand for the basis of our view of the world, of ourselves and of what we consider to be virtuous and desirable. The beliefs about our immediate environment form the top of this pyramid and can be relatively easily exchanged and modified.

Beliefs influence and select your perception of your environment. They shape your individual truth about things and events. Two people can experience one and the same event completely differently.

Depending on the beliefs they hold and the reactions and behaviour they have developed. It does not matter which conviction that is. Every conviction, however small, can have an effect on your behaviour.

Know your beliefs exactly

And that is the reason why you as a trader have to be aware of your beliefs. Trading is a performance discipline and your behavior has an immediate and massive impact on the results of your work.

Positive as well as negative!

In general:

Your beliefs unconsciously control your actions so that you gradually realize what you believe, because beliefs align your focus according to the underlying beliefs.

This connection is favourable if your beliefs and what you are striving for coincide with. On the other hand, it becomes fatal if your beliefs prevent you from pursuing meaningful goals and acting successfully.

Figure 2 illustrates the effect of our belief system on our behavior. Through what we think about a certain event or situation, we shape our subjective reality. We give external influences an internal representation of it, so to speak.

Depending on how this representation looks like, we then trigger a corresponding mood – i.e. a feeling – in ourselves and link it to the event. If something similar happens to us in the future, the probability is very high that we will show exactly this reaction to it again.

Our body language also influences our mood. It can be used to strengthen a negative emotion, but also to weaken it.

The danger of unproductive convictions

Unfortunately, there are some beliefs that are helpful in normal everyday or business life – or that many people have simply become aware of through their upbringing or their environment, but which have a negative effect on the stock market.

Want an example?

A wrong game is being played at the stock exchange and only by cheating can you gain a long-term advantage
I am a successful entrepreneur, so trading will be no problem for me.
Hey, I’m a doctor. I can trade.
This conviction has been expressed to me personally – in a similar way – more than once. Especially in Germany, the stock market is viewed rather suspiciously.

Do you think that this view will help you to make long-term profits from the markets?

Probably not! Because with this conviction you will not be able to find the cause of losses and crises in your trading. Why? Because you will blame the “evil powers” in the markets for your failures instead of looking for them yourself.

The next set of beliefs is typical for people who have had success in other areas and now want to quickly master trading:

Or… honestly:

The last two beliefs are really treacherous because they are directly connected to the ego. Many people find it extremely difficult to come to a different conviction here. But the market is definitely not interested in how many companies you have already built up before, whether you were president of the US or an academic. To trade successfully, you have to be a good trader.

No more, no less! And for that you need the right beliefs about your own identity, but most of all about trading itself.

You need to know:

To every trading strategy there are productive and harmful beliefs. If you want to trade a market opening strategy, you need to believe in its specific advantages. How you can explore and adopt such specific beliefs about individual trading setups step by step, I will show you in my blog.

Only a few people are aware of the importance of beliefs

Therefore you can gain an enormous advantage if you deal with this topic in time. Actually, you should explore your own personality and question your entire belief system.

And that before you have even made a single trade. In reality, of course, it looks completely different. The vast majority of traders will never question their beliefs.

How so?

Because they never get to the point where they understand the importance of their belief system. You do it better! And belong to that minority of traders who, at least from a certain level of frustration and disappointment about their poor performance on the stock market, want to develop themselves and their personality.

Most of the time it is pain and crisis that make us overcome our comfort and sometimes our ego, and form us into a better person. So it is completely normal if you first stumble into the stock market with naive eyes and believe that the world belongs to you now.

Only to eventually come to the insight Something has to change or I’m gonna throw in the towel. For some, this point is reached quite quickly, for others it can take years. It doesn’t matter, everyone is different and only your own experiences show you the way.

But many traders don’t understand at the decisive moment what actually has to change. And that weighs really heavily. Mostly these people come to all kinds of enlightenments.

But often they lack the insight, the cause of their problems as traders, could be found in their inner attitude. When you have reached this crossroads, you have to make the decision whether you want to give up or develop as a person.

Your motivation is crucial

Which path you decide to take depends largely on your motivation as a trader. For this reason a tip at this point: You cannot know from the beginning how important your beliefs are for success on the stock market. What you can know, however, is your drive, your motivation – in other words, the question of why do I want to trade?

Answer this question honestly, and if possible before you open your first account. If your motivation for trading is only the thrill and the fast money, you have a problem.


In this case, I guarantee that you won’t have the stamina and mental strength necessary to endure dry spells in trading and to cope with setbacks in your training as a trader, and still be able to get back on your feet and try again. You want to earn fast money and your focus is on what you want to have.

At the same time you are not really willing to pay the price. As soon as the right challenges come up, you’ll take off and your motivation will evaporate from now on.

However, if your reasons for trading are substantial and your decision to become a successful trader is rock solid, I recommend reading the second part of this article. In it I will tell you my most productive beliefs, which have made me a permanently profitable trader.

closing bell

Your inner attitude is the decisive factor in setting the course for lasting success on the stock market. It is not enough to reflect your character to find a suitable trading system for you.

No, you have to take your personality apart and check whether your convictions fit your goals as a trader. One single unproductive set of beliefs can be enough, and you sabotage your own behavior as a trader, often without even being aware of it. Most of the time you only take the result of this, namely that you are doing things again and again, which you should actually do better with your level of knowledge.

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