One of the lessons trading has taught me is that the right attitude helps create the conditions to reach your goals. I am often tested on the importance of the right attitude, as I sometimes find myself falling into old patterns of hurry, stress or negativity that come with approaching deadlines.  When I found myself feeling stressed, I had to first make myself aware of the stress, and then to re-channel any negative thoughts into the positive feeling of the blessings I possess.

As a trader, once you get clarity on what you are targeting as your goal, your attitude then becomes critical to staying on the right track.  A positive attitude will tend to open up your acceptance to new ways of trading, primarily in the areas of riding winners longer and being less hesitant to cut losers more quickly.

In the Merriam-Webster dictionary the first definition of "attitude" focuses on "the arrangement of the parts of a body or figure." Only at the fourth definition do we read that attitude is "a mental position with regard to a fact or state."  This implies that a person's body posture is an important expression of his attitude.   I have noticed that when you are sitting in front of your trading screens, when you sit up straight, it tends to inspire more confidence than if you are slouching.  There are many other physical aspects to consider in how you cultivate the proper attitude.  One I work on is steady and rhythmic breathing.  In moments of excitability I have noticed my breathing tends to become short and shallow.  This is not conducive to long-lasting focus and concentration, so I will seek to become aware and then take deep breathes at counted intervals to get into deeper breathing and a more relaxed and focused state.

Usually when we talk about attitude, we think of either people with positive attitudes or negative outlooks on life.  The optimist expects good things to happen in his life, while the nay-sayer is constantly blaming others for his difficulties.  One of the key defining points between winners and losers in trading is the ability to take full responsibility for the actions and outcomes that occur in one's trades. The acceptance of personal responsibility is a key difference between successful and unsuccessful traders, and success can be traced back to a positive mental attitude.  A positive attitude does not mean you never have negative thoughts, but it does mean that you become aware of negative thoughts quickly and seek to neutralize them or reframe them to a positive vision.

A positive attitude also allows you to find new opportunities in the midst of losing trades.  A positive attitude definitely is reinforced by past trading success, but when we ask which came first, the positive attitude or the successful trading approach, the positive attitude usually came first and helped cultivate the final outcome of trading success.

Price Headley is the founder and chief analyst of BigTrends.com.