What is confidence? Is it a thought or a feeling? Intellectual or emotional? We all understand the role it plays in dealing with markets but is it really even possible to understand?

When you have it, where is it? Think about that for a second....Like all feelings, doesn't confidence come to us through our visceral or physical selves?

This part of ourself - our "senses" or feelings - is a source of information designed to protect us. If you stop to think about it, it is our essence. The neuroscientist Damasio revised the philosopher Descartes famous statement to "I feel therefore I am" in both his 1994 and 1999 groundbreaking books.

What's a trader to do? Aren't you supposed to control feelings?

If you try to control fear, what happens to your conduit to confidence? Hence, how effective can it be to attempt to cut yourself off from both who you are and a source of valuable information?

Did you know that science has proven how a certain amount of fear gives you needed focus? To take it a step further, if you look at it logically, having no fear makes no sense. If you have NO fear whatsoever why would you ever bother to put a stop loss in? It wouldn't matter what the future brought, would it?

We talk about advanced trader psychology here at Trader Psyches. I have been asked the question does that apply to "advanced trader" or "advanced psychology" and the answer is both but with the emphasis on "Pioneers in Advanced Trading Psychology." Why? Classical trading psychology has not dealt with the reality of emotions in any realistic way. It is ironic how the obsessive effort to be rational leads to an irrational expectation and understanding of this key dimension. The perspective to use is "emotions as information".

In trading, feelings are part of your Psychological Capital™. And psych cap is the ultimate determinant in the joint probability distribution (combined set of odds) that determines the numbers at the bottom of your trading statement.

Some feelings add to psych cap and some tell you that you need to go tend to psych cap. Either way - they give you the key piece of information that you need in order to be able to execute to the plan. All that is required is that you look at them differently.

If you haven't already, get a copy of Emotional Intelligence. It is a very good place to start to re-engineer your knowledge and leverage of the essential dimension of feelings and emotions. Adopting this strategy - psych cap and emotions as information - is ironically (after all the books and talks on controlling your emotions) the key to an ever upward sloping equity curve.