Best Mark Douglas Insights on Trading
Investopaper
Mark Douglas is the author of ‘The Disciplined Trader’ and ‘Trading in the Zone’. These books help the individual trader to achieve the psychological trading discipline needed to excel in the business of trading. Douglas advocates that to be a good trader one doesn’t need an excellent IQ but a systematic approach to trading.
Here are some of the best trading insights (quotes) by Mark Douglas.
Best Mark Douglas Insights (Quotes) on Trading
Trading is not about being right or wrong. It’s a probability game.
Why do casinos make consistent money on an event that has a random outcome? Because they know that over a series of events, the odds are in their favor. They also know that to realize the benefits of the favorable odds, they have to participate in every event.
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.
When you genuinely accept the risks, you will be at peace with any outcome. When you achieve complete acceptance of the uncertainty of each edge and the uniqueness of each moment, your frustration with trading will end.
The market can do anything at any moment because every person who trades is a market variable. That means you will never learn enough to anticipate every possible way that the market can make you wrong or cause you to lose money.
As a trader, you have to decide what is more important – being right or making money because the two are not always compatible or consistent with one another.
The hard, cold reality of trading is that every trade has an uncertain outcome.
You don’t need to know what is going to happen next in order to make money.
The less I cared about whether or not I was wrong, the clearer things became, making it much easier to move in and out of positions, cutting my losses short to make myself mentally available to take the next opportunity.
What separates the “consistently great” athletes and performers from everyone else is their distinct lack of fear of making a mistake.
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.
When you really believe that trading is simply a probability game, concepts like right or wrong or win or lose no longer have the same significance.
When I put on a trade, all I expect is that something will happen.
Remember, the best traders think in a number of unique ways. They have acquired a mental structure that allows them to trade without fear. And, at the same time, keeps them from becoming reckless and committing fear-based errors.
By predefining and cutting your losses short, you are making yourself available to learn the best possible way to let your profits grow.
It’s the ability to believe in the unpredictability of the game at the micro level and simultaneously believe in the predictability of the game at the macro level that makes the casino and the professional gambler effective and successful at what they do.
