Print "One of the many contradictions of trading is that it offers a gift and a curse at the same time. The gift is that, perhaps for the first time in our lives, we're in complete control of everything we do. The curse is that there are no external rules or boundaries to guide or structure our behavior. Our last book review was all about stocks.
This one is all about you — the trader. And, how not to think. Douglas draws on years of experience in futures pits and coaching professionals to reach several key conclusions about making money in the market.
The first key point is that financial markets differ from almost every other social environment you know: work, family and friends. Even if someone disagrees with you or your boss orders you to do something, you expect them to follow certain basic courtesies. A developer might spend a week coding an application.
Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude
At the end of the time, something real and valuable will exist. This link between work and outcome is true for most things in life, but not in trading. In the market, outcomes have no direct link to your effort. Therefore, traders need to think differently. One of them is overcoming fear.
Trading in the Zone often stresses how this worry — an injury to our pride — can blind us to to reality. It can make us stick in losing stocks and prevent us from capitalizing on opportunities we might not have expected. Another problem is that many people attempting to trade come from successful professional backgrounds: doctors, lawyers, executives.
So they spend a lot of time learning about the market.
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Douglas views this as a common trap of falling into market analysis. Taking Responsibility as a Stock Trader While analyzing the market is useful, Douglas says it can prevent traders from taking responsibility for their actions. It makes them think they need to understand more instead of trading better. Another reason why traders need to take responsibility is that they can only control their own behavior and trades. They cannot control the market.
Traders must take what the market gives them and never question it: "Every trader I've worked with over the last 18 years has had to learn how to train his mind to stay properly focused in the 'now moment opportunity flow.
All that matters is following their system consistently. That way probabilities will favor him or her over time.
Being open about the market lets traders see the possibilities their pre-conceived beliefs might block. Meanwhile, strictly following rules lets them manage risk and enter positions consistently.
It also lets them rein in the one thing that is under their control: their own actions. This brings me to my favorite quote in the book. The typical trader does just the opposite: He is flexible in his rules and rigid in his expectations. Emphasis added. You might want to write in on the wall! Douglas then spends several chapters on how to overcome stubborn beliefs entrenched in our minds.
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- Sep 30, Alexander Lee rated it it was amazing Top practical trading book read-to-date.
Again, he points the mirror right back at zone trading mark douglas reader, when to close options to worry less about the market doing crazy things, and more zone trading mark douglas yourself doing crazy things.
Trading Edge One of the few drawbacks of Trading zone trading mark douglas the Zone is that Douglas compares trading to operating a casino.
His point is valid because casino zone trading mark douglas like roulette have odds favoring the house. A better example could be a grocery store that sells certain products at a loss, like milk, in hope of profiting on other items like cereal and soda. Once a critical mass of shoppers pass through their doors, the probabilities add up in their favor and they make a certain margin consistently. But they could include things like moving-average crosses, support and resistance or trend following.
As readers of Market Insights and viewers of my webinars know, my personal favorite type of edge uses sector performance.
Follow the Author
Douglas also emphasizes the importance of acting on your edges when you have them. He urges readers to identify them objectively and zone trading mark douglas on them without reservation. Limitations of Trading in the Zone Trading in the Zone is a seminal work for trader psychology and education.
It brilliantly shifts the focus from the uncontrollable market to the controllable and trainable individual mindset. It also describes how subjective forces like fear and beliefs can impede objectivity.
Summer Reading List: Mark Douglas’ Classic Guide to Trader Psychology
These are important insights for anyone looking to consistently make money in the market to realize. After all, there are deeper trends and patterns in the market. Knowing and understanding these forces can help shape your edge.
Second, many customers may not be traders. In conclusion, Trading in the Zone is one of most famous trading books of all time. Believe it or not, other people have been down the same road. And this book has helped many of them become consistently profitable traders.