Traders & Investors Club

Author:

Mark Douglas

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And you are not alone. The majority of market participants lose most of their capital within a year and give up on trading altogether usually blaming external factors such as crooked brokers, being persecuted by The Market or failing to discover those elusive 'trading secrets' that everybody else seems to know.

As we gain experience trading the market, the simple fact of the matter becomes clear; it's all in the mind.
 
All traders operate with a severe handicap right from the get go. As human beings, we are eminently unsuitable to the business of trading because our emotions overwhelm us just when we need to stay mentally focused on the job at hand. Buying low and selling high sounds great in theory but how many of us have mastered the ability to not only trade against the crowd but to trade against our own inner demons?

In my opinion, successful trading is 99% psychology and money management and 1% method. I believe that you could trade a strategy based upon the flip of a coin and, as long as you were consistent and used proper money management techniques, you would be consistently profitable.

So, why is it that something so simple is so very hard to put into practice?

Mark Douglas published his ground-breaking book, The Disciplined Trader, in 1990. In it, he demonstrated why the ingrained beliefs and habits that we have developed from an early age in order to function in society create formidable psychological barriers to being a successful trader.

Mark Douglas expanded upon his experience gained as a trading coach in Trading In The Zone, which was published in 1998. Throughout the book, he uses sporting analogies, such as the golfer who has perfected his swing but knows that in order to succeed in the tournament, his mental attitude is what will set him apart from the competition.

In Trading In The Zone, Mark Douglas addresses several key concepts necessary to understand why you are failing to make consistent profits in the market and a methodology with which to reverse your fortunes:

Taking personal responsibility for your actions
Our addiction to random rewards
The dynamics of perception
The trader's edge: thinking in probabilities
The nature of personal beliefs and the impact that they are having on your trading
How to think like a trader and become successful

There are no trading strategies described in this book because Mark Douglas assumes that you have already developed your trading style. Instead, there are simple, yet effective, techniques for changing your mindset and creating new beliefs that will open the door for you to become a more consistent and successful trader.

I thoroughly recommend Trading In The Zone and suggest that you revisit it regularly for as long as you are in the market.