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Kindle Notes & Highlights
by
Mark Douglas
But you must be aware of the presence of such beliefs, and take specific steps in your trading regimen to compensate when...
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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.
THE MECHANICAL STAGE
The mechanical stage of trading is specifically designed to build the kind of trading skills (trust, confidence, and thinking in probabilities) that will virtually compel you to create consistent results.
consistent results as a steadily rising equity curve with only minor draw downs that are the natural consequ...
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of systematically eliminating any susceptibility you may have to making the kind of fear, euphoric or self-valuation based trading errors I have described throughout this book.
If producing consistent results is your primary objective as a trader, then creating a belief (a conscious, energized
concept that resists change and demands expression) that “I am a consistently successful trader” will act as a primary source of energy that will manage your perceptions, interpretations, expectations, and actions in ways that satisfy the belief and, consequently, the objective.
At some point, if that is your desire, then you will have to step into the process of transforming yourself into a consistent winner. 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.
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.
Your first line of defense against committing a trading error is to catch yourself thinking about it.
the last line of defense is to catch yourself in the act.
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.
Making mistakes is a natural function of living and will continue to be until we reach a point at which:
1. all our beliefs are in absolute harmony with our desires,
2. all our beliefs are structured in such a way that they are completely consistent with what works from ...
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The most difficult to detect is a distracting thought that causes a momentary lapse in focus or concentration.
When our intent is clear and undiminished by any opposing energy, then our capacity to stay focused is greater, and the more likely it is that we will accomplish our objective.
defined a winning attitude as a positive expectation of our efforts, with an acceptance that whatever results we do get are a perfect reflection of our level of development and what we need to learn to do better.
What separates the “consistently great” athletes and performers from everyone else is their distinct lac...
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If you’re going to become a consistent winner, mistakes can’t exist in the kind of negatively charged context in which they are held by most people.
you have two choices:
1. You can work on acquiring a new set of positively charged beliefs about what it means to make a mistake, along with de-activating any negatively charged beliefs that would argue otherwise or cause you to think less of yourself for making a mistake.
2. If you find this first choice undesirable, you can compensate for the potential to make errors by the way you set up your trading regime. This means that if you’re going to trade and not monitor yourself, but at the same time you desire consistent results, then ...
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All you have to do is decide why you want to monitor yourself, which means you first need to have a clear purpose in mind. When you’re clear about your purpose, simply start directing your attention to what you think, say, or do.
when you notice that you’re not focused on your objective or on the incremental steps to accomplish your objective, choose to redirect your thoughts, words, or actions in a way that is consistent with what you are trying to accomplish.
I define self-discipline as a mental technique to redirect (as best we can) our focus of attention to the object of our goal or desire, when that goal or desire conflicts with some other component (belief) of our mental environment.
If there’s anything in your mental environment that’s in conflict with the principles of creating the belief that “I am a consistently successful trader,” then you will need to employ the technique of self-discipline to integrate these principles as a dominant, functioning part of your identity. Once the principles become “who you are,” you will no longer need self-discipline, because the process of “being consistent” will become effortless.
predefining your risk is a step in the process of “being consistent.”
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...
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3. I completely accept the risk or I am willing to le...
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4. I act on my edges without reservation ...
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5. I pay myself as the market makes money a...
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6. I continually monitor my susceptibility fo...
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7. I understand the absolute necessity of these principles of consistent success and, there...
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Being objective means there’s no potential to define, interpret, and therefore perceive any market information from either a painful or euphoric perspective.
you have to specifically train your mind to be objective and to stay focused in the “now moment opportunity flow.”
from the market’s perspective, “every moment is truly unique,” even though the moment may look, sound, or feel exactly the same as some moment logged away in your memory bank.
When you stop making trading errors, you’ll begin trusting yourself.
As your sense of self-trust increases, so will your sense of self-confidence.
The process of transformation starts with your desire and your willingness to refocus on the object of your desire (self-discipline).
you must “make up your mind,” with as much conviction and clarity as possible, that more than anything else you desire consistency (the state of mind of trust, confidence, and objectivity) from your trading.
EXERCISE LEARNING TO TRADE AN EDGE LIKE A CASINO
The object of this exercise is to convince yourself that trading is just a simple game of probabilities (numbers), not much different from pulling the handle of a slot machine.
From a probabilities perspective, this means that instead of being the person playing the slot machine, as a trader, you can be the casino, if:
