Trading in the Zone by Mark Douglas is certainly worth reading, but Brett Steenbarger books are better in my opinion.
I obviously agree with the latter part of what’s been said here seeing as I said the very same thing a couple posts back. It’s the first part I have a problem with.
The psychological part of trading is like the psychological part of sports. It comes down to the ability to execute in optimal fashion under pressure. There’s all kinds of stuff that can happen between the ears to lead to sub-optimal execution. Doubt and tension will trip up a trader doing analysis to pulling the trigger on a trade just as it will trip up a golfer trying to make a putt or a basketball player making a free throw.
My old best mate is a successful city trader (we’re out of touch now and it would be a bit cheeky to get intouch just because I’m learning forex).
With much respect I can say my friend is not the most intelligent of my friends (he’s probably the richest though:)) but he has great self disipline, he’s cool under pressure and is a consistent tryer. His psychological advantages.
I’m quite impatient so thought a short term trading strategy might suit me but on reflection a longer term trading plan that doesn’t have me looking at charts all day with an itchy mouse finger is more appropriate and works to avoid my psychological disadvantages (which I intend to work on).
I have too much of the basics yet to cover but when time allows I thick a bit of psycological insight would be of use.
Listen to me I’ve had more than 8 weeks demo accounting and only lost a grand;)
Thanks for explaining your views further simbafx.
I think we are talking about the same thing in fact, it’s just a case of defining a couple of ideas that seem to lend themselves well to multiple interpretations.
I think psychology is extrememly important in sports. In two athletes of equal ability, the one with the “wining attitude” will most likely do better. I’d even go as far as to say that people with less natural ability may surpass those with greater ability simply down to attitide. The same can be seen in many walks of life. In a previous career I’ve used NLP consultants to work with sales staff, and obtained fantastic results by doing so. I’ve advocated the use of coaches and mentors in many areas of business. I’d even go as far as to say a lot of the personal development technologies available have real merit in helping people achieve their goals and improve their lives.
I share your views here.
The problem is, this isnt applicable to trading. Its about positive expectancy, you either have an edge, or you dont, and no amount of psychology or money management is ever going to change that.
This is where you switch off “winning attitude” but I just see continuation. Mental states and your own personel behaviour structure can and will effect your trading. The emotional and behavioral characteristics of an individual are that individual, whether he be an athletic 400 metre hurdler or an overweight forex trader.
[B]Trading is a performance activity[/B]
Quote from Mr Brett Steenbarger Brett Steenbarger Bio :
There are many possible explanations for why people succeed in markets. The idea of trading as a performance discipline is that the process of mastering markets is similar to the process of mastering any performance domain, such as athletics or public speaking. We begin with certain talents such as the abilities to process information quickly and synthesize large amounts of data, the capacity to sustain attention, and personality traits that enable us to keep a relatively steady mindset in the face of uncertainty.
This developmental course is typically a lengthy one and involves numerous setbacks as well as milestones. What sustains the growth process is a very strong interest in the performance field and a learning process that nurtures continued motivation and a sense of growing mastery. Talent and interest will not turn into expertise if they are not channeled into ongoing learning, review of performance, and efforts at improvement.
I’d probably go so far a to argue that a healthy dose of cynisism is probably a far better attribute to possess for a trader than a faith in ones own ability
Through certain installments of a trading life I would say cynicism was an absolutely essential attribute. 
You all need to listen to Simbafx he is absolutely right. Slogans such as develop a winning forex attitude ARE pure nonsense , shpeel to make you buy books. The psychology of forex trading applies to one thing only, the LEARNING stage.
It is important to have the right attitude while learning this game, just like any other learning curve you need a lot of patience, and a mindset to study and learn as much as you can for at least a year before even thinking about live trading, and to have the discipline not to jump the gun and begin live trading before you have a good trading method worked out and properly tested.
You will know when you have properly learned what you need to know when you realise psychology is no longer a factor to your trading because your trades are no longer shots in the dark that leave you stressing out when losses occur, or even worse, stressing because you dont understand WHY those losses are occuring.
There is only one way to trade profitably, that is to trade only when the probability is high that a successful trade will take place, this means identifying a set of circumstances that will result in a profitable trade more often than it does not. Just as Simbafx says, to give you an edge.
If you do not manage to identify a set of trading criteria that fits that explanation and trade according to that set of rules it doesnt matter what your psychology is, how much you believe you will be profitable or how much you WILL yourself to win, or how much time you spent on your money management you will not win unless you are very lucky and god is on your side.
If you are a mere motal, over time the odds will roll against you and any gains you made WILL dwindle into losses.
Not sure who you’re arguing with there, no one is suggesting sitting in front of the screen chanting “I’m a winner!” is the key to success.
If you do not manage to identify a set of trading criteria that fits that explanation and trade according to that set of rules it doesnt matter what your psychology is… you will not win unless you are very lucky and god is on your side.
That must be one hell of a set of rules.
You will know when you have properly learned what you need to know when you realise [B]psychology[/B] is no longer a factor to your trading because your trades are no longer shots in the dark that leave you stressing out when losses occur, or even worse, stressing because you dont understand WHY those losses are occuring.
a : the mental or behavioral characteristics of an individual or group
b : the study of mind and behavior in relation to a particular field of knowledge or activity
How can this become no longer a factor?
I do like “Trading in the Zone”
Overrated in my opinion.
I dont like it either, but it’s worth reading just for the bit about the 5 fundemental truths of trading.
- Anything can happen.
- You don’t need to know what is going to happen next to make money.
- There is a random distribution between wins and losses for any given set of variables that define an edge.
- An edge is nothing more than an indication of a higher probability of one thing happening over another.
- Every moment in the market is unique.
As much as I despise the book, I’m glad I read it !
It is.
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