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

by Mark Douglas

Conversely, if you’re angry and afraid, it’s because you believe to some degree that the market creates your out...

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.

Did you ever wonder why leaving money on the table is often more painful than taking a loss?

The market didn’t do anything but give us exactly what we wanted, but for whatever reason, we weren’t capable of acting on the opportunity appropriately. In other words, there’s no way to rationalize the pain away.

The most efficient path to discovering what you need to be successful is to develop a winning attitude, because it’s an inherently creative perspective.

Not only does a winning attitude open you up to what you need to learn; it also produces the kind of mind-set that is most conducive to discovering something no one else has experienced.

the first step is to embrace the responsibility and stop expecting the market to give you anything or do anything for you.

Taking responsibility is the cornerstone of a winning attitude.

The best traders stay in the flow because they don’t try to get anything from the market; they simply make themselves available so they can take advantage of whatever the market is offering at any given moment.

Everything that you could have, should have, or would have recognized in the moment appeared invisible, then all becomes painfully evident after the fact, after the opportunity is long gone.

To be consistent, you have to learn to think about trading in such a way that you’re no longer susceptible to conscious or subconscious mental processes that cause you to obscure, block, or pick and choose information on the basis of what will make you happy, give you what you want, or avoid pain.

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

This means that you must learn how to think about trading and your relationship with the markets in such a way that the possibility of being wrong, losing, missing out, or leaving money on the table doesn’t cause your mental defense mechanisms to kick in and take you out of the opportunity flow.

If you can learn to create a state of mind that is not affected by the market’s behavior, the struggle will cease to exist.

When the internal struggle ends, everything becomes easy.

At that point, you can take full advantage of all your skills, analytical or otherwise, to eventually real...

When you accept the risk the way the pros do, you won’t perceive anything that the market can do as threatening.

It may seem as if the market is causing you to feel the way you do at any given moment, but that’s not the case.

It’s your own mental framework that determines how you perceive the information, how you feel, and, as a result, whether or not you are in the most conducive state of mind to spontaneously enter the flow and take advantage of whatever the market is offering.

Professionals don’t perceive anything about the markets as painful; therefore, no...

People see what they’ve learned to see, and everything else is invisible until they learn how to counteract the energy that blocks their awareness of whatever is unlearned and waiting to be discovered.

Each trade is simply an edge with a probable outcome, and statistically independent of every other trade.

One of your basic objectives as a trader is to perceive the opportunities available, not the threat of pain.

If what you perceive at any given moment causes you to feel fear, ask yourself this question: Is the information inherently threatening, or are you simply experiencing the effect of your own state of mind reflected back to you

If you can accept the fact that the market doesn’t generate positively or negatively charged information as an inherent characteristic of the way it expresses itself, then the only other way information can take on a positive or negative charge is in your mind, and that is a function of the way the information is processed.

Our minds constantly associate what’s outside of us (information) with something that’s already in our mind (what we know), making it seem as if the outside circumstances and the memory, distinction, or belief these circumstances are associated with are exactly the same.

Developing and maintaining a state of mind that perceives the opportunity flow of the market, without the threat of pain or the problems caused by overconfidence, will require that you take conscious control of the association process.

The best traders, on the other hand, are not impacted (either negatively or too positively) by the outcomes of their last or even their last several trades.

learn how to train his mind to stay properly focused in the “now moment opportunity flow.”

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.

The best traders have evolved to the point where they believe, without a shred of doubt or internal conflict, that “anything can happen.”

We can’t perceive the potential for the market to continue to move in a direction that is already against our position if, for example, we are operating out of a fear of being wrong.

you’ve built a mental framework that allows you to recognize a set of variables in the market’s behavior that indicates when an opportunity to buy or sell is present.

This is your edge and something you know. However, what you don’t know is exactly how the pattern your variables identify will unfold.

By making yourself available, you consciously open yourself up to find out what will happen next; instead of giving way to an automatic mental process that causes you to think you already know.

The essence of what it means to be in “the zone” is that your mind and the market are in sync. As a result, you sense what the market is about to do as if there is no separation between yourself and the collective consciousness of everyone else participating in the market. The zone is a mental space where you are doing more than just reading the collective mind, you are also in complete harmony with it.

In order to experience synchronicity, your mind has to be open to the market’s truth, from its perspective.

Acting appropriately on anything requires belief and clarity of intent, which keeps our minds and senses focused on the purpose at hand.

The first step on the road toward getting your mind and the market in sync is to understand and completely accept the psychological realities of trading.

THE MARKET’S MOST FUNDAMENTAL CHARACTERISTIC

The market can do virtually anything at any time.

The most fundamental component of any market is its traders.

Individual traders act as a force on prices, making them move by either bidding a price up or offering it lower.

all price movement is a function of what individual traders believe about what is high and what is

the range of the market’s behavior in its collective form is limited only by the most extreme beliefs about what is high and what is low held by any given individual participating in that market.

There can be an extreme diversity of beliefs present in any given market in any given moment, making virtually anything possible.

it takes only one other trader to negate what you believe about what is high or what is low.

only the best traders consistently predefine their risks before entering a trade. Only the best traders cut their losses without reservation or hesitation when the market tells them the trade isn’t working.

And only the best traders have an organized, systematic, money-management regimen for taking profits when the market goes in the direction of their trade.

Not predefining your risk, not cutting your losses, or not systematically taking profits are three of the most common—and usually the mo...