Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude
You may know a lot about the markets. You may even know the major players, when to buy, when to sell, and which stocks have the potential to move.
But how well do you know yourself?
Even the most astute, highly motivated, well grounded traders can be crippled by counterproductive thinking that leads to poor decisions and trading errors. They suffer from an inability to stay objectively focused or lack the necessary confidence to execute their trades properly. Or they let deeply ingrained mental contradictions and misconceptions about trading or the nature of the market rule their stock-picking.
The result? An extremely high percentage of traders lose all or most of their money within the first year of trading.
Mark Douglas, president of Trading Behavior Dynamics and a widely respected trading coach to some of the biggest names and firms on the Street, has devoted the last twenty years to helping traders develop the confidence, discipline, and winning attitude that it takes to master the market.
For Douglas, maximizing the trader's state of mind is the key to successful results. Not exhaustive market analysis or the latest fad "system." He teaches traders to think in terms of probabilities and to adopt the core beliefs necessary to assuming a "winner's mindset." Traders in the "zone" don't need to know - and don't care - what the market is going to do next. They know what they are going to do next. And that makes all the difference.
In Trading in the Zone, Douglas uncovers the underlying reasons for lack of consistently profitable trades and helps traders overcome the deep-rooted mental habits that cost them money. Douglas takes on the myths of the market and exposes them, one by one, teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be guided by and be comfortable with the "uncertainty principle" that governs all stock speculation.
Trading in the Zone introduces a whole new mental dimension to getting an edge on the market. Use it to leverage the power of the "zone" for unprecedented profit.
Table of Contents
ATTITUDE SURVEY xvii
CHAPTER 1 THE ROAD TO SUCCESS: FUNDAMENTAL, TECHNICAL, OR MENTAL ANALYSIS?
IN THE BEGINNING: FUNDAMENTAL ANALYSIS 1
THE SHIFT TO TECHNICAL ANALYSIS 3
THE SHIFT TO MENTAL ANALYSIS 4
CHAPTER 2 THE LURE (AND THE DANGERS) OF TRADING
THE ATTRACTION 17
THE DANGERS 20
THE SAFEGUARDS 25
Problem: The Unwillingness to Create Rules 27
Problem: Failure to Take Responsibility 28
Problem: Addiction to Random Rewards 30
Problem: External versus Internal Control 31
CHAPTER 3 TAKING RESPONSIBILITY
SHAPING YOUR MENTAL ENVIRONMENT 34
REACTING TO LOSS 38
WINNERS, LOSERS, BOOMERS, AND BUSTERS 5O
CHAPTER 4 CONSISTENCY: A STATE OF MIND
THINKING ABOUT TRADING 58
REALLY UNDERSTANDING RISK 61
ALIGNING YOUR MENTAL ENVIRONMENT 64
CHAPTER 5 THE DYNAMICS OF PERCEPTION
DEBUGGING YOUR MENTAL SOFTWARE 70
PERCEPTION AND LEARNING 74
PERCEPTION AND RISK 79
THE POWER OF ASSOCIATION 80
CHAPTER 6 THE MARKET'S PERSPECTIVE
THE "UNCERTAINTY" PRINCIPLE 88
THE MARKET'S MOST FUNDAMENTAL CHARACTERISTIC 93
CHAPTER 7 THE TRADER'S EDGE: THINKING IN PROBABILITIES
PARADOX: RANDOM OUTCOME, CONSISTENT RESULTS 102
TRADING IN THE MOMENT 106
MANAGING EXPECTATIONS 113
ELIMINATING THE EMOTIONAL RISK 120
CHAPTER 8 WORKING WITH YOUR BELIEFS
DEFINING THE PROBLEM 125
DEFINING THE TERMS 128
HOW THE FUNDAMENTAL TRUTHS RELATE TO
THE SKILLS 130
MOVING TOWARD "THE ZONE 135
CHAPTER 9 THE NATURE OF BELIEFS
THE ORIGINS OF A BELIEF 139
BELIEFS AND THEIR IMPACT ON OUR LIVES 142
BELIEFS VS. THE TRUTH 147
CHAPTER 10 THE IMPACT OF BELIEFS ON TRADING
THE PRIMARY CHARACTERISTICS OF A BELIEF 153
SELF-EVALUATION AND TRADING 167
CHAPTER 11 THINKING LIKE A TRADER
THE MECHANICAL STAGE 173
THE ROLE OF SELF-DISCIPLINE 179
CREATING A BELIEF IN CONSISTENCY 184
EXERCISE: LEARNING TO TRADE AND EDGE LIKE A CASINO 189
A FINAL NOTE 201
ATTITUDE SURVEY 203