Trading in the Zone

No trading today, I spent the time reading instead.

I watched a Mark Douglas interview the other day and I was impressed with what he had to say about trader psychology. I have been meaning to read his book, and after Don Miller posted a picture of the cover on one of his blog entries I was again reminded and decided to go for it.

UPS made the delivery just as I was finishing yesterday's blog entry. I had a busy afternoon ahead of me so I wasn't able to check it out till bed time. I stayed awake and read as long and as fast as I could. By the time I shut the lights off I had decided that I am not going to place another trade until I finish reading it.

Thus far the reading has been chuck full of 'ah-hah' moments. Perhaps the biggest being the reconciliation of  the fact that the market can do anything at any time and yet pro-traders still make money. I have always given some kind of abstract acknowledgment to this concept, but resisted it deep down inside. For example, reading Scott's comment about how trading is a complete roll of the dice I thought to myself 'Yeah - I believe that, but he knows something that I don't know.' What reconciled these seemingly contradictory ideas together for me was the idea of responsibility: A trader is completely responsible for making money or losing money in the market. The market is there, behaving as it is behaving, it owes the trader nothing and cannot be blamed for the fact that the trader lost money, and cannot accept responsibility for the fact that the trader profited. It is the trader taking advantage of (or not taking advantage of), opportunities presented by the market that determine the bottom line. The distinction is subtle, but it tied everything together for me in a new way.

Another mind blowing concept is the idea he presents concerning fears, about how they are internal protective structures rather than stemming from the environment itself. Amazing. I wasn't able to finish the book today due to other obligations, but I am going to put yesterday's plan on hold (addressing my fears) until I finish reading what Mr. Douglas has to say.

Is this the answer to my trials? Is it enough to be made aware of the true nature of this business? I don't know, this book is popular and there are still plenty of struggling traders. What is apparent though is that Mr. Douglas has described me as if he had been sitting front row and center in my brain for the last few months. And he has helped people like me overcome the same psychological obstacles that I finally recognize I face.

So off I go to read some more. Trade well. And here is some good listening if you are in the mood. Nothing like a little bit of rhythm and sweet guitar tone.