Confidence, in short, means knowing you’re going to win. It isn’t a magic quality which once possessed can never be lost. To be sure, regular winners will have an inner conviction that they must win over time, if they play to the rules. This is partly an inherent state of mind and partly the result of long experience of seeing the rules working. But no one but a fool is convinced they can win just by playing. You win by doing your homework better, following the rules more closely, and acting more consistently then the other players. Winning gives you confidence and confidence helps you win. The closer you get to only trading when you’re confident you’ll win, the higher your win rate and your confidence will be.
– John Percival, The Way of the Dollar
