Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude

by Mark Douglas

This book is designed to give you the insight and understanding you need about yourself and the nature of trading, so that actually doing it becomes as easy, simple, and stress-free as when you’re just watching the market and thinking about doing it.

technical analysis turns the market into an endless stream of opportunities to enrich oneself.

the way we think is what makes us unique, probably even more unique than our physical features do.

Traders who make it beyond “the threshold of consistency” usually experience a great deal of pain (both emotional and financial) before they acquire the kind of attitude that allows them to function effectively in the market environment. The rare exceptions are usually those who were born into successful trading families or who started their trading careers under the guidance of someone who understood the true nature of trading, and, just as important, knew how to teach it.

Learning to accept the risk is a trading skill—the most important skill you can learn.

The best traders aren’t afraid. They aren’t afraid because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective. At the same time, the best traders have developed attitudes that prevent them from getting reckless.

It is a simple fact of trading that the potential exists to do enormous damage to ourselves—damage that can be way out of proportion to what we may think is possible. There are many kinds of trades in which the risk of loss is unlimited.

no matter how good a trade looks, it could lose.

bottom line is that successful traders have virtually eliminated the effects of fear and recklessness from their trading.

It’s a fundamental shift in attitude that accounts for their success, not some brilliant realization about the market, as most people erroneously assume.

When you put on a trade, it is in anticipation of making money. Every other trader in the world who puts on a trade does so for the same reason. When you look at your relationship with the market from this perspective, you could say that your purpose is to extract money from the markets, but, by the same token, the market’s sole purpose is to extract money or opportunity from you.

Remember our definition of a winning attitude: a positive expectation of 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 do better.

Accepting the risk means accepting the consequences of your trades without emotional discomfort or fear.

Most of us have no concept of the extent to which we are continually surrounded by the invisible opportunities inherent in the information we’re exposed to. More often than not, we never learn about these opportunities and, as a result, they remain invisible.

If there is such a thing as a secret to the nature of trading, this is it: At the very core of one’s ability 1) to trade without fear or overconfidence, 2) perceive what the market is offering from its perspective, 3) stay completely focused in the “now moment opportunity flow,” and 4) spontaneously enter the “zone,” it is a strong virtually unshakeable belief in an uncertain outcome with an edge in your favor.

We have to be rigid in our rules and flexible in our expectations. We need to be rigid in our rules so that we gain a sense of self-trust that can, and will always, protect us in an environment that has few, if any, boundaries. We need to be flexible in our expectations so we can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to us from its perspective.

the truth is a function of whatever works in relation to what we are trying to accomplish at any given moment.