Trading in the Zone:
“Master the market Confidence, discipline and a winning attitude”
Market Confidence, Discipline, Wining Attitude
Market Confidence discipline, winning attitude is the key trading zone in forex market. The goal of any trader is to turn profits on a regular basis, yet so few people ever really make consistent money as traders. What accounts for the small percentage of traders who are consistently successful? To me, the determining factor is psychological—the consistent winners think differently from everyone else.
I started trading in 1978. At the time, I was managing a commercial casualty insurance agency in the suburbs of Detroit, Michigan. I had a very successful career and thought I could easily transfer that success into trading. Unfortunately, I found that was not the case. By 1981, I was thoroughly disgusted with my inability to trade effectively while holding another job, so I moved to Chicago and got a job as a broker with Merrill Lynch at the Chicago Board of Trade. How did I do? Well, within nine months of moving to Chicago, I had lost nearly everything I owned. My losses were the result of both my trading activities and my exorbitant life style, which demanded that I make a lot of money as a trader.
From these early experiences as a trader, I learned an enormous amount about myself, and about the role of psychology in trading. As a result, in 1982, I started working on my first book, The Disciplined Trader: Developing Winning Attitudes. When I began this project I had no concept of how difficult it was to write a book or explain something that I understood for myself in a manner and form that would be useful to other people. I thought it was going to take me between six and nine months to get the job done. It took seven and a half years and was finally published by Prentice Hall in 1990.
In 1983, I left Merrill Lynch to start a consulting firm, Trading Behavior Dynamics, where I presently develop and conduct seminars on trading psychology and act in the capacity of what is commonly referred to as a trading coach. I’ve done countless presentations for trading companies, clearing firms, brokerage houses, banks, and investment conferences all over the world. I’ve worked at a personal level, one on one, with virtually every type of trader in the business, including some of the biggest floor traders, hedgers, option specialists, and CTAs, as well as neophytes As of this writing, I have spent the last seventeen years dissecting the psychological dynamics behind trading so that I could develop effective methods for teaching the proper principles of success.
What I’ve discovered is that, at the most fundamental level, there is a problem with the way we think. There is something inherent in the way our minds work that doesn’t fit very well with the characteristics shown by the markets.
Those traders who have confidence in their own trades, who trust themselves to do what needs to be done without hesitation, are the ones who become successful. They no longer fear the erratic behavior of the market. They learn to focus on the information that helps them spot opportunities to make a profit, rather than focusing on the information that reinforces their fears.
While this may sound complicated, it all boils down to learning to believe that:
(1) you don’t need to know what’s going to happen
next to make money;
(2) anything can happen; and
(3) every moment is unique, meaning every edge and outcome is truly a unique experience.
The trade either works or it doesn’t. In any case, you wait for the next edge to appear and go through the process again and again. With this approach you will learn in a methodical, non-random fashion what works and what doesn’t. And, just as important, you will build a sense of self-trust so that you won’t damage yourself in an environment that has the unlimited qualities the markets have.
Most traders don’t believe that their trading problems are the result of the way they think about trading or, more specifically, how they are thinking while they are trading. In my first book, The Disciplined Trader, I identified the problems confronting the trader from a mental perspective and then built a philosophical framework for understanding the nature of these problems and why they exist.
I had five major objectives in mind in writing Trading in the Zone:
• To prove to the trader that more or better market analysis is not
the solution to his trading difficulties or lack of consistent
• To convince the trader that it’s his attitude and “state of mind”
that determine his results.
• To provide the trader with the specific beliefs and attitudes that
are necessary to build a winner’s mindset, which means learning
how to think in probabilities.
• To address the many conflicts, contradictions, and paradoxes in
thinking that cause the typical trader to assume that he already
does think in probabilities, when he really doesn’t.
• To take the trader through a process that integrates this thinking
strategy into his mental system at a functional level.
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