Mark Douglas: Any info?

[MsFutures]

Quote from Jack_Larkin:

Sounds like the book just isn't targeted for you then.

This book is targeted for the following category:
traders who have already figured it all out, but "still have issues".

According to some statistics, less than 5% traders who have figured it out. Some of the 5% who have figured out have no more issues that require a shrink, the remaining, perhaps 1-2 or 3%, does.

So you are right, I don't fit into the last 1-3% who have figured it out and still need a shrink.

 

[NoDoji]

Quote from OptionsCharm:

Then wether a trader truly has an edge or wether the edge still needs work becomes a question. That said, perhaps we have different understanding in what constitutes an "edge".

An "edge" means to me not only a winning method, but also conviction in such a method. Conviction comes from seeing certain things happen over and over again and lots and lots of pain putting the method to test, for years, --- we as traders know this all too well. With conviction of his/her method, a trader should have entered a trade where he/she is supposed to without too much hesitation, not "react to price movement long after a valid trade was signaled".

To me, conviction is part of the edge. If a trader is still not convinced ( believe) in his/her method after years of pain and hard work in deriving such a method, I don' know how another person can help to internalize such a conviction into the trader.

To me, an edge in trading is a favorable probability of profit over a series of trades after commissions and average slippage. How that edge is derived isn't important, but the ability to follow the trading plan that produces the edge (what you call "conviction") is crucial.

Suppose I have two trading systems. One system has a win rate of 90% and the other has a win rate of 30%. Both systems produce the same net profit per contract/lot over each series of N trades. Based on that information alone, do you have a preference for one system over the other? If you do, the very fact that you have a preference tells you that psychology is a factor in your trading no matter how much conviction you have in a particular system that's demonstrated an edge over time through varying market conditions.

I'm sure there are more than a few dozen traders here on ET who were able to profit nicely in a sim account, but unable to replicate the results in a live account. I read posts by such people all the time.

You can read all the books in the world on trading psychology, read all the "self-help" books you can get your hands on, pay someone to be your trading coach or mentor, but at some point you have to take action. You have to do the opposite of what hasn't been working. No other person can do that for you (unless you get someone else to trade your account for you).

To paraphrase William James, you can't think your way into right action; you have to act your way into right thinking.

If you have a system with a fully tested edge, you can think about how great it is 24/7, but unless you put on the trades it signals and manage those trades according to its rules, it's only a thought.

Once you do put on the trades and manage them according to the rules, and you experience the positive results over time, the "doing" eventually brings about the true conviction of belief.

 

[NoDoji]

Quote from OptionsCharm:

According to some statistics, less than 5% traders who have figured it out.

My personal experience demonstrated the same statistic. Less than 5% have a defined tradable edge.

 

[marketsurfer]

Quote from HurricaneUS:

For the vast majority of traders, Trading in the Zone will be useless to them..

Why?

Because most traders mistake bad psychology with lack of an edge

If you lack an edge to consistently pull money out of the markets then, bet your ass, you better listen to your instincts hardwired into you by mother nature...in this case your fear of pulling the trigger is warranted and is a natural defense mechanism designed to prevent you from hurting yourself (i.e., your account)

If you indeed have an edge that has been thoroughly tested and makes money regardless of whether you take the signal or not but you still wrestle with following your rules then you need to seek professional help from a shrink instead of a book.

All in all, trading psychology/mindset is highly overrated as a contributing factor that causes traders to lose money and anyone that says otherwise is simply making excuses and using it as a crutch for their inability to make money from trading

, SAC and other huge funds with definite edges have psychologists on staff-- there's a reason but I do agree without an edge psych only makes the inevitable losses feel better.

surf

 

[HurricaneUS]

Quote from marketsurfer:

, SAC and other huge funds with definite edges have psychologists on staff-- there's a reason but I do agree without an edge psych only makes the inevitable losses feel better.

surf

they probably also have vip hosts to get them blow and hookers....but I would put trading psychologists in the same class - i.e., a "nice-to-have"...even better if your trading psychologist is all three-in-one...a hooker that supplies you with meds

 

[J-Law]

If you're reading Douglas, you're at the stage of your trading curve that you realize it's not the markets, but you that is getting in the way of your consistent profitability. Lots people on both sides of the fence when it comes to trading psychology. Some feel its hooey/some feel its not. Some of it IS not useful/some of it is. At the end of the day, all that matters is what works for you, & helps you break thru.

Douglas talks a great deal about beliefs, which is very useful. but his texts never really lays out a "true" approach or solution. But, very informative to the how's & why you do what you do,when you trade. Whether its Douglas's texts or Kiev or Steenbarger. The take away from any of them is to find out what plagues you & work on & through those issues. It's a bit of down the rabbit hole endeavor. But, if you're at the above mentioned point, working in any other direction probably wont be as fruitful as one would like (approach, testing, charting, instruments)

Everyone who is consistently profitable in this business has come to that place by their own path & did what worked best for them. You are no different. Just keep at it & if you want it bad enough, you'll get find a way. Take people's post on these boards with a grain of salt.

Whether you are consistent, marginal, or unprofitable, the Ed Seykota quote/cliche holds all the truth anyone needs.

"A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That's the kind of thing winners do"

The ball forever is in all our "courts". Forget the negative, take what works for you, & use everything & keep it positive.

Best of luck !

PS last I checked when calling his office a few years back was that he trades. The conversation I had with his receptionist at that time was he couldn't come to the phone as bonds hadn't closed yet. That's good enough for me that the guy understands the hooks & rips of managing a P&L. On to that, the guy doesn't have to be a billionaire to teach you something about the process. Can't speak to his offerings though. My 2 ticks.

 

[optionbull]

Quote from NoDoji:

To me, an edge in trading is a favorable probability of profit over a series of trades after commissions and average slippage. How that edge is derived isn't important, but the ability to follow the trading plan that produces the edge (what you call "conviction") is crucial.

Suppose I have two trading systems. One system has a win rate of 90% and the other has a win rate of 30%. Both systems produce the same net profit per contract/lot over each series of N trades. Based on that information alone, do you have a preference for one system over the other? If you do, the very fact that you have a preference tells you that psychology is a factor in your trading no matter how much conviction you have in a particular system that's demonstrated an edge over time through varying market conditions.

I'm sure there are more than a few dozen traders here on ET who were able to profit nicely in a sim account, but unable to replicate the results in a live account. I read posts by such people all the time.

You can read all the books in the world on trading psychology, read all the "self-help" books you can get your hands on, pay someone to be your trading coach or mentor, but at some point you have to take action. You have to do the opposite of what hasn't been working. No other person can do that for you (unless you get someone else to trade your account for you).

To paraphrase William James, you can't think your way into right action; you have to act your way into right thinking.

If you have a system with a fully tested edge, you can think about how great it is 24/7, but unless you put on the trades it signals and manage those trades according to its rules, it's only a thought.

Once you do put on the trades and manage them according to the rules, and you experience the positive results over time, the "doing" eventually brings about the true conviction of belief.

Let me ask you this, have you seen an "edge" evaporate, meaning no longer work ?

 

[Wide Tailz]

Quote from marketsurfer:

VN blew out, in fact, he blew his account out several times---

sounds like a smart person should listen to what he has to say.

 

[Dustin]

+1 psycho babble

You learn to trade and find an edge, or you don't. I've seen edges come and go, along with my profitability. Psychology has never played much of a role.

 

[RedDuke]

Quote from Dustin:

+1 psycho babble

You learn to trade and find an edge, or you don't. I've seen edges come and go, along with my profitability. Psychology has never played much of a role.

Not all of it.

The dog example is a good one. Once bitten by a dog a person might convince himself that every dog will bite him, which is obviously not the case.