Trading in the Zone

Actually I’m a person quite lazy to read. I will fall asleep if I reading something nonstop and I really mean it. However, it is time for me to change my attitude already, I have start reading and this is the only way I can gained more exposure of trading knowledge, or else I will be keep limit myself in a same box forever. After I suffer in the heaviest sideways ever, I stop trading until now. I know losing in futures market is unavoidable and it is part of the risk that must be taken but the frequency of losing make me unable to take it anymore. I very understand that as long there is an emotion disturbance, it means that there is something wrong with myself, and I have to stop trading. As a result, I download a lot of trading book and I hope after go through all the trading books, it can provide me some guidance to improve me trading skills.

So I start reading a book call “Trading in the Zone” by Mark Douglas. Actually this is neither a technical analysis nor a system development book but it is a book about market psychology that investors that encounter. This book I would say it is quite hard to understand or maybe my trading experience was not so deep enough, so some part that the author mentioned was quite confusing. However, there is some part that I really agree with it and it did help me to understand myself what kind of emotion problem I did encounter when I start involve in trading. At first, author was mentioned the only key the success in trading, is not about consistency in winning or consistency in following your signal, it is about the consistency in following your own rules. In order for you to achieve the consistency, you have to rigid to your rules and flexible on the expectation. Rules are about entry point, cut lost and profit taking while expectation is the outcome of the trade. Most of the trader was doing opposite ways, and they will tends to overtrade during a sequence of winning trade while they also become unconfident whenever there is a series of losing trade.

If futures market is all about a probability game, so the only thing have to keep focus is eliminate the emotional risk of trading by establishing a mindset such as: 1) Anything can happen, 2) You don’t have 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 variables that define an edge, and 4) Every moment in the market is unique. If you able to establish such a mindset, then you will be more stress free in execute any trade and I am sure all the top traders are having the same mindset as what author mentioned. It was very great I able to finish this book in 1 week and I did benefit something from this book. Emotion always constitute a large portion in making decision for any trade, so when one day I can trade without any emotion, then I will view that the path of becoming a successful trader and become nearer and nearer.