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Trading in the Zone: The 5 Fundamental Truths |
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Monday, January 02, 2006 |
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I finished reading "Trading in the Zone" by Mark Douglas yesterday. For those of you who haven't heard of it or read it, I would highly recommend it. Douglas doesn't offer any specific strategies to becoming a successful trader but advises that the first step to becoming a successful trader is to accept the psychological realities of trading. A lot of what he advises, I have consciously accepted but the goal is for my subconscious to fully accept it so that it actually becomes part of who I am. Our beliefs are engrained in our minds and a lot of these beliefs don't allow us to think like successful traders. The process by which we can start to think like successful traders involves "deactivating" these engrained beliefs and activate new beliefs. The new belief will take form and become part of our subconscious. He mentions the importance of the 5 fundamental truths which we must train our minds to accept: 1. Anything can happen 2. You don't need to know what is going to happen next in order to make money 3. There is a random distribution between wins and losses for any given set of variables that define an edge 4. An edge is nothing more than an indication of a higher probability of one thing happening over another 5. Every moment in the market is unique Here are his 7 principles of consistency: 1. I objectively identify my edges 2. I predefine the risk of every trade 3. I completely accept the risk or I am willing to let go of the trade 4. I act on my edges without reservation or hesitation 5. I pay myself as the market makes money available to me 6. I continually monitor my susceptibility for making errors 7. I understand the absolute necessity of these principles. I never violate them.
Learn Forex
december 2005
mark douglas
trading in the zone
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Last Updated ( Monday, January 02, 2006 )
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