I believe conviction is what seperates the Buffet's, Soros' and Templeton's from everyone else. These guys and other billion dollar traders have such an iron level of conviction in what they are doing, there's no more guess work. Many people wrote off Buffet as an old fogy in the late 90's because he wasn't buying tech stocks. Imagine if you're on a deserted island and everyone around you is going out and pulling down coconuts out of the trees. They are so tasty! Look, everyone is doing it, therefore it must be so. They're going to make my life better. There are no harmful side effects. Yet Buffet is in the corner (i.e. Nebraska) and he's not nibbling on this fruit. What's wrong with that old man. Well, that "old man" stuck with what he knew. He only bought stocks at certain prices, he had tried and true principles that have lasted for decades and he wasn't about to jeopardize his companies health on a new exotic fruit. And that's why he has more cash than most 3rd world countries. Jim Rogers of the Quantum Fund spoke about his conviction for trades in "Market Wizards". He mentioned shorting gold at $675 and HOLDING ON while gold went to over $800, only to crash. That took an incredible amount of conviction. Where does it come from? It comes from your beliefs about what works. And your beliefs about what work come from your experience and your environment. Trading without extraneous information helps strengthen your conviction. The most profitable thing I ever did was turn off the TV, getting away from the chatter and gossip. Getting away from internet sites that weren't helping me. <b> Guarding your mind is tremendously valuable. </b> When there is no opposition to your methodology, you can judge yourself much better. There's a better sense of clarity. How much more conviction would you have for your trades if you ONLY used your current methodology and past data and backtests that you have? If you only used what was relevant. The main problem is that most people don't have the experience to only use their current methodology and delete all other information. Build as much experience as possible through backtests and real world experience. To short gold at $675 and hold on for another $125 required experience. The experience isn't necessarily in years. It's in examples and past trades. If I had hundreds or thousands of previous bubble examples, that's certainly better than just one previous example. If I examined the nuances of different bubbles, that would help. If I had a well defined exit strategy, that would help as well. If you build up a certain level of experience and preparation, conviction automatically increases. Another ingredient for building conviction is knowing why your methodology works. This is much trickier. Jim Rogers builds his methodology around supply/demand fundamentals and the cycles of human emotion for example. Buying on panic and selling on euphoria. Since human emotions never change, the strategy will never change. The methodology is based on solid ground. Ask yourself, why does my methodology work? What are the underlying principles behind it? When you eliminate excess information, when you focus on your results and experiences and when your methodology is based on timeless and well grounded principles, that's the recipe for more conviction in your trading.