mark douglas - trading in the zone

[...]... CHAPTER 3 Interestingly, most traders are closer to the way they need to think when they first begin trading than at any other time in their careers Many people begin trading with a very unrealistic concept of the inherent dangers involved This is particularly true if their first trade is a winner Then they go into the second trade with little or no fear If that trade is a winner, they go into the next... traders, the only way to extract that revenge is to conquer the market, and the only way to conquer the market is through market knowledge, or so they think In other words, the underlying reason for why the novice trader is learning about the market is to overcome the market, to prove something to it and himself, and most important, to prevent the market from hurting him again He is not learning the market... pain can be quite shocking—not shocking enough, how- 46 CHAPTER 3 ever, to quit trading Besides, in his mind the situation wasn't his fault anyway; the market did it to him Instead of quitting, the great feeling that he experienced when he was winning will be fresh in his mind, and will inspire him with a sense of determination to continue trading Only now he's going to be smarter about it He's going... novice trader to put on a string of winning trades, when many of the industry's best market analysts would give their right arms for a string of winning trades The analysts have the skills, but they don't have the winning attitude They're operating out of fear The novice trader experiences the feeling of a winning attitude because he's not afraid But that doesn't mean he has a winning attitude; it only means... limitations you have in these areas into consideration and trade accordingly From the market's perspective, each moment is neutral; to you, the observer, every moment and price change can have meaning But where do these meaning exist? The meanings are based on what you've learned, and exist inside your mind, not in the market The market doesn't attach meanings or interpret the information it generates... matched, what's the factor that tips the balance one way or the other? In both cases, the answer is attitude What makes trading so fascinating and, at the same time, difficult to learn is that you really don't need lots of skills; you just need a genuine winning attitude Experiencing a few or more winning trades can make you feel like a winner, and that feeling is what sustains the winning streak This... 15 learn how to redefine your trading activities in such a way that you truly accept the risk, and you're no longer afraid When you've achieved a state of mind where you truly accept the risk, you won't have the potential to define and interpret market information in painful ways When you eliminate the potential to define market information in painful ways, you also eliminate the tendency to rationalize,... and see the world These thinking patterns are so deeply ingrained that it rarely occurs to us that the source of our trading difficulties is internal, derived from our state of mind Indeed, it seems much more natural to see the source of a problem as external, in the market, because it feels like the market is causing our pain, frustration, and dissatisfaction The Road to Success 13 Obviously these are... rewarded for The Lure (and the Dangers) of Trading 31 again for doing that task Every time it was rewarded in the past, the reward came as a surprise As a result, from the monkey's perspective, there's no reason to quit doing the task The monkey keeps on doing the task, even without being rewarded for doing it Some will continue indefinitely I'm not sure why we're susceptible to becoming addicted to... of the industry's best market analysts are the worst traders imaginable Intelligence and good market analysis can The Road to Success certainly contribute to success, but they are not the defining factors that separate the consistent winners from everyone else Well, if it isn't intelligence or better analysis, then what could it be? Having worked with some of the best and some of the worst traders in . Cataloging -in- Publication Data Douglas, Mark (Mark J.) Trading in the zone : master the market with confidence, discipline, and a winning attitude / by Mark Douglas, p. cm. ISBN 0-7 35 2-0 14 4-7 . qualities the markets have. Most traders don't believe that their trading problems are the result of the way they think about trading or, more specifically, how they are thinking while they are trading. . truly accept the risk, you won't have the potential to define and interpret market information in painful ways. When you eliminate the potential to define market information in painful ways,