Excerpts from Trading in the Zone

I make a point of re-reading trading in the zone, or at least my notes from it, pretty frequently. Always a great reminder…

Here are a handful that stood out to me on my latest read.

Trading in the Zone 

by Mark Douglas

“The consistency you seek is in your mind, not in the markets. It’s the attitudes & beliefs about being wrong, losing money, and the tendency to become reckless, when you’re feeling good, that cause most losses, not technique or market knowledge.”

Trading in the Zone -M.D.

“If you perceive market information as painful in some way you will try to avoid that pain by either consciously or subconsciously blocking that information from your awareness. In the process, you systematically cut yourself off from any number of opportunities to enrich yourself.”

“Energy from the outside, in the form of whatever is expressing itself, gets transformed by our nervous system into electrical impulses and then gets stored in our inner, mental environment as a memory or distinction about the nature of the way things exist.”

“Anything that has energy has the potential to act as a force expressing its form, and that is exactly what our memories, distinctions and beliefs do. They act as a force on our senses from the inside, and they have a profoundly limiting effect on the information we perceive in any given moment, making much of the information that is available from the environments perspective, and the possibilities inherent within that information Literally Invisible.

There are many ways in which the external environment can express itself that we don’t perceive simply because we haven’t learned about them yet. (the first time you looked at a price chart did you see all you see know? No, but all the information you now see was there the first time as well but you hadn’t learned to see it.)

The structured energy that’s inside of you now acts as a force on your eyes, causing you to recognize the various distinctions that you’ve learned about. Since the energy wasn’t there the first time, all the opportunities that you now see were there, but at the same time invisible to you.

Most have no concept of the extent to which we are surrounded by invisible opportunities inherent in the information we’re exposed to.”

“People see what they want to see. People see what they’ve learned to see, and everything else is invisible until they learn how to counteract the energy that blocks their awareness of whatever is unlearned and waiting to be discovered.”

Paradox of embracing uncertainty:

Micro level: believe in uncertainty and unpredictability of the outcome of each individual hand.
Macro level: believe that the outcome over a series of hands is relatively certain and predictable.

If the market generates information from neutral stand point where does the threat of pain come from? It comes from the way we define and interpret the available information.

Expectations:

Trading in the Zone -M.D.

When I put on a trade I expect only that something will happen.
All I know is the odds of it moving in my favor are acceptable, at least in relation to how much I am willing to risk to find out if it does.
The losses create no emotional damage because I interpret them not negatively but as the cost of doing business and the amount I must spend to make myself available to winning trades and trends.