Trading Books: ‘Trading In The Zone’
‘Trading in the Zone’, authored by Mark Douglas, is an engaging book which is more related to the psychology of trading. I would definitely recommend you read it as your second book. Mark Douglas was nothing short of a genius, he recognises the most common issues relating to trading. Offering traders solutions to face them in the best way possible — using a psychological frame of mind. He devised ‘the uncertain principle’ — It is not possible to predict the future with absolute accuracy, anything can happen anytime.
Mark attended The Michigan State University, where he completed his degree in International Communications and Political Science. He had a career in finance, working alongside some of the best floor traders, money managers and worked with hedge funds. He began coaching traders in 1982, infact for 25 years he taught traders the mentality and mindset to help them with their trading. He became very knowledgeable with talking to traders, understanding how they feel whilst trading. He believed to become a successful trader you need to focus on the three M’s: Mind, Method and Money. By using his knowledge and experience he wrote a number of books. In 1990 he wrote his first book ‘The Disciplined Trader’ which gave him some recognition and success.
‘Trading in The Zone’ was his second book published in 2000, this was much more successful — as I have mentioned above I thoroughly recommend it. Mark uses a psychological way to analyse the main issues traders relate to. If you find yourself making the same mistakes, this book is like the trader’s Bible of psychology offering valuable advice to handle them in the most efficient way.
These are five useful quotes taken from ‘Trading in The Zone’:
1.Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
The four fears taken from ‘Trading in The Zone’:
- Fear of Missing Out (FOMO). This is when you fear you are missing out on an opportunity whilst everyone else is actually gaining from it.
- Fear of Loss. This is the fear of losing what you have already gained.
- Fear of Being Wrong. This is the fear that your next trade might not go as well as you expected, hence lack of confidence.
- Fear of Letting a Win Turn into a Loss. This is the fear of losing all you have gained.
Mark wrote further books; The Complete Trader, The Little Book of Trading Performance, Becoming ‘The Disciplined Trader’ and Simple Wisdom for Prosperous Trading. He also wrote how to develop your skills to be an accomplished author and also a few motivational books. During his career he gained many awards especially related to finance. The most distinguished was the Bull / Bear Award which he achieved in 2006, 2008, 2011, 2015 and again in 2017.
Unfortunately Mark passed away in 2015 at the age of 67. Through his books he continues to educate us: to have confidence in our trading, remove the fears we have but however still controlling our behaviour.
