“Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.” – Mark Douglas
Mark Douglas is one of the best authors on the topic of Trading psychology. His book Trading in the Zone has been a #1 best seller for many years. Unfortunately, Mark died at age 67 (R.I.P), but his lessons still stand true to this day.
In this post, we will look at some of the critical elements to Marks thinking and how this can help you improve as a trader.
“Anything can happen”
This statement might sound obvious, but most traders forget this one critical belief when trading. It does not matter how we analyse the charts; we can never predict 100% of the time what will happen next.
“You don’t need to know what is going to happen next in order to make money”
Yes! Mark was precise with this statement because someone with a random trading system can still make money in any market, but he did not say the trader would be consistently profitable.
“Every moment in the market is unique”
For the market to be the same as it was the previous day, All participants must come back to execute a trade at the same time down to the nanosecond. This highlights that every trader needs to leave room for adapting to unique changes in market dynamics.
“I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstanding, intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.” – Mark Douglas
Thank You, Mark Douglas, for your contribution towards trading psychology.