I spent hours reading and re-reading this book, and eventually made a summary of all the key quotes. In a series of posts I’ll be sharing these quotes with you, and hopefully they will inspire you to take your trading to the next level. I hope you enjoy my first selections:
1. You will need to learn how to adjust your attitudes and beliefs about trading in such a way that you can trade without the slightest bit of fear, but at the same time keep a framework in place that does not allow you to become reckless.
2. Trading is an activity that offers the individual unlimited freedom of creative expression.
3. The unlimited characteristics of the trading environment require that we act with some degree of restraint and self-control, at least if we want to create some measure of consistent success.
4. The hard reality of trading is that, if you want to create consistency, you have to start from the premise that no matter what the outcome, you are completely responsible.
5. One of the principal reasons so many successful people have failed miserably at trading is that their success is partly attributable to their superior ability to manipulate and control the social environment, to respond to what they want. (Unfortunately) the market doesn’t respond to control and manipulation (unless you’re a very large trader).
6. The tools you will use to create this new version of yourself are your willingness and desire to learn, fuelled by your passion to be successful. Successful traders have virtually eliminated the effects of fear and recklessness from their trading.
7. Attitude produces better overall results than analysis or technique. (more…)
Archives of “endeavour” tag
rssComplacency & Exhaustion
Complacency
When I think of complacency two major things come to mind:
Often a traders biggest loss comes after a string of winners. This is well documented and suggests to me that complacency is present. The ‘every swing I take is a home run feeling’ or the ‘I can do no wrong feeling’. Sure enough when in this state the market is all too willing to smash you back down hard as a reminder of your mortality.
The other thing I think of are traders who have taken their foot off the gas. Who have decided that their approach is the only thing that works and will never need changing. You have to stay on your toes. The chances of the same approach working over and over ad infinitum are slim. It may not need a complete overhaul and rather only subtle changes but it is complacent to believe something is a sure thing.
Exhaustion
Most traders are imminently aware of their account balance – what I think many don’t think about is their emotional balance. Trading can take a serious toll on your emotional balance. It is a competitive endeavour that requires decision making under stressful conditions. Each trade you chose to assess and then take uses up some of this emotional capital. You need to be aware of this. Not doing so leads not only to exhaustion but possible burn out.
As I said I’d love to read some examples from you on these points as they pertain to trading in the comments section. If you’d like maybe we can go into these areas in more detail in the future.
12 Quotes From ‘Trading In The Zone'
1. Attitude produces better overall results than analysis or technique.
2. Positive winning attitude = expecting a positive result from your efforts, with an acceptance that whatever results you get are a perfect reflection of your level of development and what you need to learn to get better.
3. Winning in any endeavour is mostly a function of attitude.
4. Losing and being wrong are inevitable realities of trading.
5. The market has no responsibility towards the individual trader. Taking responsibility means acknowledging and accepting, at the deepest part of your identity, that you – not the market – are completely responsible for your success or failure as a trader.
6. If you perceive the endless stream of opportunities to enter and exit trades without self-criticism and regret, then you will be in the best frame of mind to act in your own best interest and learn from your experiences.
7. You will need to learn how to adjust your attitudes and beliefs about trading in such a way that you can trade without the slightest bit of fear, but at the same time keep a framework in place that does not allow you to become reckless.
8. Trading is an activity that offers the individual unlimited freedom of creative expression.
9. The unlimited characteristics of the trading environment require that we act with some degree of restraint and self-control, at least if we want to create some measure of consistent success.
10. The hard reality of trading is that, if you want to create consistency, you have to start from the premise that no matter what the outcome, you are completely responsible.
11. One of the principal reasons so many successful people have failed miserably at trading is that their success is partly attributable to their superior ability to manipulate and control the social environment, to respond to what they want. (Unfortunately) the market doesn’t respond to control and manipulation (unless you’re a very large trader).
12. The tools you will use to create this new version of yourself are your willingness and desire to learn, fuelled by your passion to be successful. Successful traders have virtually eliminated the effects of fear and recklessness from their trading.
Mark Douglas’s Five Fundamental Truths
1. Anything can happen. Translated – you have no control over the market.
2. You don’t need to know what’s going to happen next in order to make money. You don’t need to be psychic, or try to predict the market. This is not to say that you cannot predict what the market will do next and be correct, only that you don’t have to, and that by trying to predict you shackle yourself to ‘the need to be right’ and the associated ball and chain.
3. Wins and losses are random – You will never know when a trade will be a winner in advance, only that the conditions that define your edge are present.
4. Your edge is nothing more than a higher probability of one thing happening over another. Your edge is no guarantee of a winning trade, just of winning over time.
5. Every moment in the market is unique. Just because a similar trade won last time does not mean it will this time, and by treating each trade as totally unique you can see the truth of the trade without relating it to ‘what happened last time’.
These beauty in these theories is that they take the emphasis off any one trade, and turn your trading into a big picture endeavour.