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

by Mark Douglas

As unnatural as it seems to do so, you can’t let some previous experience (either negative or extremely positive) dictate your state of mind.

I know that based on the market’s past behavior, the odds of it moving in the direction of my trade are good or acceptable, at least in relationship to how much I am willing to spend to find out if it does.

I also know before getting into a trade how much I am willing to let the market move against my position.

There is always a point at which the odds of success are greatly diminished in relation to the profit potential. At that point, it’s not worth spending any more mon...

The loss doesn’t create any emotional damage, because I don’t interpret the experience negatively.

To me, losses are simply the cost of doing business or the amount of money I need to spend to make myself available for the winning trades.

The best traders are in the “now moment” because there’s no stress.

There’s no stress because there’s nothing at risk other than the amount of money they are willing to spend on a trade.

They are not trying to be right or trying to avoid being wrong; neither are they ...

They completely accept what the market is offering them, and they wait for the next edge.

we can “know” exactly how much we need to risk to find out if that edge is going to work.

If what we think we know starts expanding to what the market is going to do, we’re in trouble.

Making money consistently is a by-product of acquiring and mastering certain mental skills.

Consistency is the result of a carefree, objective state of mind, where we are making ourselves available to perceive and act upon whatever the market is offering us (from its perspective) in any given “now moment.”

Carefree means confident, but not euphoric.

Making yourself available means trading from the perspective that you have nothing to prove.

you come to the market with no agenda other than to let it unfold in any way that it chooses and to be in the best state of mind to recognize and take advantage of the opportunities it makes available to you.

If you don’t expect the market to make you a winner, you have no reason to be afraid of losing.

If you don’t expect the market to keep going in your direction indefinitely, there is no reason to leave money on the table.

Finally, if you don’t expect to be able to take advantage of every opportunity just because you perceived it and it presented itself, you hav...

all you need to know is: 1. the odds are in your favor before you put on a trade; 2. how much it’s going to cost to find out if the trade is going to work; 3. you don’t need to know what’s going to happen next to make money on that trade; and 4. anything can happen;

When you use “other” information, outside the parameters of your edge to decide whether you will take the trade, you are adding random variables to your trading regime.

The irony is, you will be afraid of random, inconsistent results, without realizing that your random, inconsistent approach is creating exactly what you are afraid of.

if you believe that an edge is simply a higher probability of one thing happening over another, and there’s a random distribution between wins and losses for any given set of variables that define an edge, why would you gather “other” evidence for or against a trade?

What separates the best traders from all the rest is that they have trained their minds to believe in the uniqueness of each moment

The stronger your belief in the uniqueness of each moment, the lower your potential to associate.

The lower your potential to associate, the more open your mind will be to perceive what the market is offering you from its perspective.

The secret to effectively changing our beliefs is in understanding and, consequently, believing that we really aren’t changing our beliefs; we are simply transferring energy from one concept to another concept, one that we find more useful in helping us to fulfill our desires or achieve our goals.

Anything we feel guilty about can have an adverse effect on our sense of self-worth.

being a bad person, and most people believe that bad people should be punished, certainly not rewarded.

The trade either works or it doesn’t. In any case, we go on to the next trade.

To operate in a state of not having to know, you have to properly manage your expectations.

you must realign your mental environment so that you believe without a shadow of a doubt in the five fundamental truths.

“I am a consistently successful trader”

When it comes to personal transformation, the most important ingredients are your willingness to change, the clarity of your intent, and the strength of your desire.

you must choose consistency over every other reason or justification you have for trading.

The first step in the process of creating consistency is to start noticing what you’re thinking, saying, and doing.

Observing yourself objectively implies doing it without judgment or any harsh criticism

If producing consistent results is a function of eliminating errors, then it is an understatement to say that you will encounter great difficulty in achieving your objective if you can’t acknowledge a mistake.

What separates the “consistently great” athletes and performers from everyone else is their distinct lack of fear of making a mistake.

The reason they aren’t afraid is that they don’t have a reason to think less of themselves when they do make a mistake,

We were taught to correct our mistakes or miscalculations with anger, impatience, and a distinct lack of acceptance.

no source of negatively charged energy and consequently no source for self-denigrating thoughts.

Therefore, two completely contradictory beliefs can exist in your mental system, side by side.

but the reality is that you aren’t being disciplined at all; you are simply functioning from a different set of beliefs that compel you to behave in a way that is consistent with your desires, goals, or objectives.

I AM A CONSISTENT WINNER BECAUSE:

1. I objectively identify my edges.

2. I predefine the risk of e...

3. I completely accept the risk or I am willing to le...

4. I act on my edges without reservation ...