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Having second thoughts about a trade strategy isn’t always a bad thing. In fact, rethinking can actually be more beneficial for your trading and here’s why.

As in other areas outside of trading, the act of questioning our convictions can be unnerving since it makes the world (or the markets) appear even more unpredictable.

American author and psychologist Adam Grant wrote in his book Think Again:

“Rethinking is a skill set, but it’s also a mindset. It requires us to admit that the facts may have changed, that what was once right may now be wrong.”

While self-doubt runs the risk of developing “imposter syndrome” or a psychological pattern in which an individual doubts their skills, talents, or accomplishments, Grant notes that rethinking brings a few key advantages.

First, it can motivate us to work harder. When we feel like impostors, we feel like we have more to prove and earn our merit.

Also, it can encourage us to work smarter. When we’re not sure if we’re going to win, we have nothing to lose by rethinking our strategy.

Lastly, it can make us better learners. Having doubts about our own knowledge and skills makes us more open to learning from others.

So, how can you develop the habit of rethinking in order to improve your trading? Here are some simple ways:

1. Think like a scientist

When you form a trade setup or develop a strategy, be mindful of when you are giving in to confirmation bias or suffering tunnel vision.

View your ideas as a hunch or hypothesis that must first be tested with data or evaluated under different market conditions or potential scenarios.

By challenging your thoughts and seeking out information that can invalidate your initial idea, you can escape echo chambers and even come up with backup plans in case potential surprises occur.

2. Treat mistakes as lessons

Instead of beating yourself up for losing trades or missing out on good setups, take a few moments to rewind and review what went down.

Sure, negative emotions can be difficult to ignore at first, but the more you practice acceptance, the easier it gets to shift to a growth mindset. Remind yourself that you’re going for progress and not perfection.

3. Learn from other traders

While some prefer to go through trading all on their own, it can also be helpful to have a support group of sorts that can encourage and also challenge you.

Not every trader you meet will be supportive of your trade strategies. In fact, you might encounter more critics than cheerleaders in this particular field.

But conflict doesn’t always have to be disagreeable. Instead of letting dissenters weigh you down, keep an open mind, respect their pushback, and try to evaluate their opinions constructively.

More often than not, being able to see your trade strategy from a different vantage point can alert you to potential weak spots and reframe your thinking.