Trading In The Zone by Mark Douglas. He has written other books on trading to teach people about the trading journey and how to have a winning attitude in the stock market.
Douglas uncovers the underlying reasons for inconsistency and helps traders overcome ingrained habits of mind that cost them money. It tackles the myths of the market and exposes them one by one, teaching traders to look beyond random outcomes, understand the true realities of risk, and become comfortable with the “odds” of market movement that govern all market speculation.
Table of Contents
Investment And Trading In The Zone
The best traders treat trading like a numbers game. Playing numbers means repeating the same process in investment or trading systems many times, with many failures before success. It is the same approach that top marketers, athletes, and poker players take.
Trading In The Zone must understand the difference between short-term (micro) and long-term (macro) results. It is what the book “Trade in the Territory: Dominate the Market with Confidence, Discipline, and a Winning Attitude” advocates. You can rely on this strategy as Mark started educating traders in 1982 and understands the psychology of investing and trading. He lays out the myths one by one, teaching traders to see beyond random results and understand the truth in risk and market movement. It conducts seminars and training programs to teach people how to trade in the market with confidence, discipline and understanding. Trading In The Zone It helps traders overcome fear and ingrained mental habits that prevent them from being successful and become disciplined traders who are always successful.
Some of these conclusions he teaches about the investment industry include:
Microbelief = each trading result is independent and random
[Macro belief = the result of a series of actions produces steady results]
[Micro level = erratic]
Macro level = predictable
No need for a crystal ball
A trader does not need to know what will happen next in the market to make money from trading. All that is necessary is that some market analysis shows that under certain conditions, the market will move predictably “most” of the time or generate more profit than others when it moves predictably. Once did. Not him. This is the COMMERCIAL EDGE.
It is impossible. Each trade (microlevel) is statistically independent because acting the same as any other trade requires all market participants to perform the same way simultaneously. Trading In The Zone Unless a trader trains his mind to perceive each market situation as unique, this uniqueness will be automatically filtered by the trader’s perception.
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Accept uncertainty for a good stop loss and take profit
When a stop-loss order is placed, it should be done in the belief that the outcome of the trade is uncertain, and therefore the probability of the order being executed is entirely high. With this belief, a trader will be confident that if the stop loss occurs, it will not be a financial or emotional issue. Then the next opportunity can be seized with a clear mind.
When a trade is profitable, a trader must stick to the predefined strategy of making a profit to make a profit. If a swap doesn’t work, leave it! It doesn’t matter if this trade works out because the trader is confident that the strategy works long-term over a series of transactions.
Odds: you don’t need to win every Trading In The Zone
Trading In The Zone Professional traders need to understand the role of psychology and individual mindset in investing and trading systems. It is very important to let every trade play out for the odds to work. If a trader breaks the rules of the trading system, there is no way to trust the probability of long-term success, as odds govern market speculation. For example, a trader can always be successful with a 2:1 risk: on each trade, he gets rewards and only 40% of his business.
Once a trader fully accepts the uncertainty of every “edge” and the uniqueness of every moment, the frustration of trading will end. It is enormous!
Past trades do not affect market risk
Most traders perceive risk based on their last two or three trades. But the best traders are not affected positively or negatively by the results of their latest businesses.
Overcome The Fear Of Trading In The Zone
A trader must train his mind to focus on current possibilities and not dwell on past trades. A Trading In The Zone must have an unshakable belief in the uncertainty of the present opportunity and an unshakeable belief in the long-term advantage of the trading system to ensure profitability. This should not be an outlook for current trading, only for long-term profitability.
The fear of being wrong only makes us perceive information that tells us we are right. It causes a trader to make bad trades. The fear of being wrong also makes us afraid to trade after a loss, which can cause a trader to lose good works.
I Truly Believe That Markets Can Do Anything.
“Trading in the zone” means trading in harmony with the collective wisdom of each market participant. The market environment is different from others and should therefore be treated as such, suited to a trader’s way of thinking. Therefore, market can do almost anything at any time. Trading In The Zone It is important to believe
Nothing is stopping prices from going as high (or as low) as some traders around the world think. All it takes is another trader with a different perspective to cancel or even reverse a trade. From this point of view, it would be ridiculous not to have an acceptable stop-loss or a systematic way to take profits when ANYTHING can happen.
Only the best traders are taught to believe that anything can happen and always factor in what they don’t know. – Discuss with what you know, realize what you don’t know.
Trading In The Zone needs an internal mechanism in the form of strong beliefs that compel him to act appropriately at all times. The most effective and functional belief is that anything can happen. This is the fundamental belief of all beliefs necessary to succeed in trading.
Market analysis is not the route to consistent results and will not solve business problems.
If you depend on other people’s market analysis to enter or maintain a position, you can lose a lot of money.
Most market analysis will tell you where the market could potentially go.
However, it will rarely teach you or give you options to manage and exit the trade.
So the moment you blindly follow someone’s analysis and enter a trade, you’ll end up with a question:
To make matters worse, instead of wondering when to cut your losses when the trade starts losing.
You start collecting more market analysis or opinions that only support your losing trade. And also, Which in turn makes you a “trader”.
Create A Repeatable Business Routine And Schedule
No doubt your routine and business hours will be different from mine due to various factors such as:
- Traded markets
- Time zone
But the main idea is exactly when and when NOT to check your charts.
Because bad trading habits happen the more you look at your trading account profits and losses.
It is a myth that “it takes a long time to see the charts” to make money in the markets.
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