Welcome back to our discussion on Napoleon Hill’s work The Law of Success in 16 Lessons.

If you’re just joining us or would like a refresher on the Laws of Success, they are:

1. A Definite Chief Aim
2. Self-Confidence
3. Habit of Saving
4. Initiative and Leadership
5. Imagination
6. Enthusiasm
7. Self-Control
8. The Habit of Doing More Than Paid For
9. Pleasing Personality
10. Accurate Thinking
11. Concentration
12. Cooperation
13. Profiting by Failure
14. Tolerance
15. Practising the Golden Rule

In the previous article in this series, we looked at Enthusiasm, the sixth lesson in the Law of Success. The lesson on Enthusiasm marked the end of Volume 1 of my copy of The Law of Success in Sixteen Lessons, so now is a good time to quickly recap the series so far.

We began with A Definite Chief Aim in mind. For the purpose of this series, we used a trading goal of $10,000 profit per month, understanding that the first goal is to become profitable, and then to scale up until you reach your desired level of income, whether that’s $10,000 a month or $10,000,000 a month. We then looked at the role Self-Confidence plays in either helping or hindering you on the way to achieving your Definite Chief Aim. At this point, the Habit of Saving was introduced with the goal of acquiring discipline as well as additional cash. Next, we tackled Initiative (doing what needs to be done without being told) and Leadership (being able to make decisions), both crucial characteristics of successful traders. We looked at Imagination, and the ability to think critically about your trading education, trading analysis and trading systems. And finally, we looked at the important role of Enthusiasm in helping us to take actions that bring us closer to our Definite Chief Aim.

In this article, we will look at an important counter-balance to Enthusiasm as we tackle Self-Control. Hill describes enthusiasm as “the vital quality that arouses you to action”, while Self-Control “is the balance wheel that directs your action so that it will build up and not tear down”. Self-Control, he continues, is used to “direct your enthusiasm to constructive ends.” He gives an example of a survey of prison inmates, where 92% of those surveyed were incarcerated because they “lacked the Self-Control to direct their energies constructively”.

There are many ways in which our Self-Control is put to the test. Hill uses examples such as controlling our emotions during an argument, resisting the temptation to spend money on items we don’t need and refraining from engaging in gossip. These days, Self-Control is arguably even more difficult, with distractions like the 24 hour news cycle and endless streams of videos on YouTube or TikTok. But for this article, we’ll focus on Self-Control in regard to trading.

In the 1970s, an experiment testing delayed gratification on children was run by Professor Walter Mischel of Stanford University. In the experiment, children were offered either one small reward now or two small rewards later, either in the form of a marshmallow or a pretzel, based on the child’s preference. You may have seen this “marshmallow test” on social media as people film their own children undertaking it! The test was designed to study ‘delayed gratification’, but is also a measure of Self-Control. The study found that for the most part, children who could delay their gratification tended to be more successful and have better outcomes in areas of life such as academia and health.

It takes Self-Control to be a professional trader. There will be many times that you want to take a trade but will have to refrain from doing so because the setup is not ready or the Reward to Risk Ratio isn’t high enough. There will be times that you will want to exit a trade purely based on fear, often because of something someone else has said – perhaps someone on tv or online who you perceive to have more experience than you (hint: that’s not always the case). Professional traders use a trading plan to make their decisions, meaning they only need to employ Self-Control to follow their trading plan. To make it even easier, we use a simple one page trading plan in the Active Trader Program Online Training.

In trading, our ‘marshmallow test’ uses real money instead of marshmallows. We often have the opportunity to bank a single, crisp banknote today, or the option to hold on for a couple of weeks and take home a suitcase full of cash! I’m exaggerating a little bit, but these are real tests of Self-Control that traders go through. Each time you are tempted to break your risk management rules or to veer away from your trading plan, imagine a single, crisp banknote, and a whole suitcase full of $100 bills. Make sure your goal is to target suitcases, while keeping your risk the size of a single note.

If you are in a trade where your profit target will make you $10,000, but you jump out early with $100 profit because you got scared, then you are not giving yourself the chance to get your hands on the whole suitcase. Similarly, if you break your risk management rules by over trading due to greed or a fear of missing out, you are risking losing the entire suitcase full of cash! Now obviously trading is all done online – there are no banknotes or suitcases full of cash! However, it’s important to remember that we’re not just dealing with numbers on a screen, we are dealing with actual money. So next time you’re thinking about breaking your rules, bring the image of a suitcase full of cash to mind and remember why you are trading in the first place!

So how do we improve our Self-Control? If you have already developed the Habit of Saving from our third article, you are on the way! But regardless of whether you want to save more money or control your temper or manage your emotions while trading, Hill states that Self-Control all comes down to one thing – thought control. He uses the example of a family who, in the middle of a heated argument, are interrupted by the doorbell ringing. The family immediately control themselves because they desire to do so. This proves that it can be done, and quickly, if the desire is there.

So how can we use desire to increase our Self-Control? If your Definite Chief Aim is important enough, that is a good place to start. We spoke about using a Definite Chief Aim of making $10,000 per month from trading. If achieving this goal is important enough, you will desire it enough to override the urges to take unnecessary risks in your trading. It will be easier to exert Self-Control. Over time, the goal is to fill your mind with thoughts that serve you rather than thoughts that hinder you.

I’ll end with a story I heard the late psychologist Dr Harry Stanton tell. He spoke of a woman who wanted to lose weight, but who couldn’t resist going to the cake shop and buying sweets every lunchtime. Even though she knew that she wanted to lose weight and she knew that buying cake wasn’t going to help her achieve that goal, she told him that she lacked the Self-Control to make the right decision, and she bought a cake. She hated herself for doing it, and berated herself, but this didn’t stop her.

Dr Harry asked her to find a photograph of how she wanted to look, and she found a picture of herself from a decade earlier, when she was happy with her figure. She wanted to return to this figure but was never able to. Dr Harry asked her to look at the image every day and imprint it into her mind, which she did. The next time she went into the cake store, the image of her ideal figure popped into her mind, straight from the photograph, and she immediately said “no, I’m not buying cake today” and left the store. That’s an example of using a positive desire to increase Self-Control. Images are very powerful, so choose carefully what you put into your brain!

What can you do today to improve your own self-control? Here are some action items to consider.

Action Items:

• Think of an area that you would like to improve your Self-Control in, such as your trading. Perhaps you’d like to take trades with a high Reward to Risk Ratio (the Active Trader Program sets a minimum of a 10 to 1 Reward to Risk Ratio, meaning that traders are taught how to find trades that will make a minimum of $10 or more for every $1 risked on the trade.). Then, write a positive statement that expresses this desired behaviour change as if it is already happening (these are called affirmations). For example:  “I take high quality trades with a high Reward to Risk Ratio”.  If you are not sure where to begin, you can easily start with a variation of the classic Emile Coue phrase, such as “every day in every way, my trading is getting better and better”.

• Find an image that represents the attainment of your Definite Chief Aim. If your goal is financial freedom, how does that look? Is it a dream home in an island paradise? Is it a garage full of expensive cars like David Bowden’s collection? Is it a suitcase full of cash? You’ll know it’s the right image if, like the lady wanting to quit eating cake, it empowers you to make the right decision the next time your Self-Control is tested!