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"Trading in the Zone" by Mark Douglas Book Review: Profile Traders

Updated: Nov 6, 2022

The complete title of the book says it all.

If you are a trader who wants to taste success in this business, then this book is a must-read for you.

The title itself speaks volumes about how you should approach the markets and what you should not compromise with.

The work of a lifetime is presented in a book. What more do you want as a trader?

Do you want to take a lifetime mastering market? If not, let's jump in.

Does the Road to Success Start on the Road?

Mark starts the book with a meticulously thought that draws our attention to the shifts a trader lays focus in. He beautifully chooses life examples and his own experience that forces us to embrace that shift. Every word mentioned in the first chapter is coined so that you cannot accept that it has more to do with the mind now.

Mark has undoubtedly been able to shift our focus from fundamental analysis and technical analysis to mental analysis. He does not discard them as obsolete but explains why trader psychology has evolved into a make-or-break for this generation of traders, at least for now.

The road to success undoubtedly does not start on the road. Success begins in the mind, and that is where Mark chooses to start this journey for you as a trader.

One aspect of this shift that a trader can achieve is to start thinking like a trader. A trader who accepts the risk is inevitable in trading rather than one who just takes risks. The moment you accept the risk, you will manage it as well.

Perceptions that Stand out Here

"No matter how much you learn about the market's behavior no matter how brilliant an analyst you become, you will never learn enough to anticipate every possible way that the market can make you wrong or cause you to lose money."

Don't these words give you enough clue why you need to make that shift?

Mark beautifully explains, "Unless you learn to completely accept the possibility of an uncertain outcome, you will try either consciously or unconsciously to avoid any possibility you define as painful."

In Trading, are you the Bait?

The markets present limitless ways to express ourselves when we trade in them. This is because every trader is a variable of the market. Each one brings his own study, perception, and expectations to the markets.

This brings us to the fact that limitless possibilities also bring problems. Suppose a trader does not realize there could be a problem because of his own preparation and perception. In that case, he is not adequately equipped to overcome it.

How big players hunts the stop-losses of retail traders

Mark has beautifully explained that most of our decision-making process comes from childhood upbringing. He stresses the need to unlearn what we have learned in society to depend on each other to fulfill basic needs.

Markets don't provide you the comfort, and you are left with nothing but yourself to accomplish it. This is a boon in disguise handed out by the markets as described in the chapter 'The Lure (And the dangers) of trading.

It is you who are in complete control of when to start a trade, be in it and end the trade. All of this can happen if we simply do not focus on random rewards. You would rather be better off by keep doing the task described in the study on the psychological effects of random rewards on monkeys.

Creating that Positive Winning Attitude

Mark describes that the consistently successful trader is someone you want to become. That doesn't exist yet, and you must constantly create that version of yourself.

This constant version of you can only be created when you carry a winning attitude. This is a reflection of your efforts and development. It comes from completely accepting risk and accounting for any eventuality. You further learn to take responsibility for all your actions rather than blame it on the markets.

The first step to building that positive winning attitude is by taking complete responsibility for your actions.

Who are your Enemies, then?

Euphoria and self-sabotage are your enemies until the time you have started to cultivate that positive winning attitude in you. When cultivating a positive winning attitude, you don't allow these emotions to take over you or your trading.

Mark goes on to different categories of traders. These winners take responsibility for their actions, accept risk, and know trading is a game of probabilities. Then, the losers carry an illusion of trading or are addicted to it.

Who is your enemy in stock market trading?

The remaining group of traders is the "Boom and Busters." Their equity curve is like a roller-coaster ride. They know how to make money but have never learned how to keep it.

Mark describes consistency as a state of mind rather than something that is outside of you in the chapter "Consistency, A state of mind." Your state of mind is a by-product of your beliefs and attitudes. They are no different from being happy than trying to be happy when you are not.

Consistency comes from doing things effortlessly because you don't self-doubt your actions. This becomes only possible when you accept risk and take responsibility. You make yourself available to the opportunity presented to you. The markets have nothing to do with this but you.

He adds it is about aligning your mind with the markets that do not perceive the markets as a threat. When you do that, you remove the flawed thought, eliminating fear-based errors. These errors are a result of the threat you otherwise would have carried.

Live in the 'now moment

The way Mark calls out why traders fail to have a clear perception of the market is remarkable. It is nothing but a psychological gap that a trader must learn to fill. Professional traders simply trade in the present (now moment) rather than let recent trades manipulate their minds. They are simply focused on the "now-moment opportunity flow."

He elaborates by revealing some core abilities that let a trader evolve to the point he accepts that anything can happen in the markets.

  1. Trading without fear or overconfidence

  2. Perceive what markets offer from its perceptive

  3. Stay focused entirely on the "now-moment opportunity flow."

  4. Spontaneously enter the "Zone."

Beliefs and Their Impact on our Lives and Trading

There is no surprise that we are not born with a belief system. They are acquired as we live our lives and learn to believe. Mark is impressive when he explains how our belief system has impacted our perception of the markets over the years.

Expectations and behavior are a result of our belief system. They shape how we feel about the consequences of our actions. When we accept the fact that anything can happen to the market, we accept the uncertainty of our actions.

You learn to accept that there are innumerable possibilities of an outcome of your actions in the markets. Markets are nothing but a confluence of similar belief systems of all participants in the market.

How to Think Like a Trader?

Mark explains you think like a trader in the same way you use market analysis to identify patterns. Similarly, you need to identify patterns in your thought process. The moment you start thinking you know more, the less successful you get.

You may be the best analysts out there, but you don't have to know what would happen. A state of mind thinking about the future that is yet to happen does not let you think like a trader. A trader should think in terms of probabilities rather than the outcome.

Mark takes us through 3 stages of development of a trader in the chapter "Thinking like a trader." You can greatly benefit from the exercise given in this chapter.

  1. Mechanical stage

  2. The role of self-discipline

  3. Creating a belief of consistency


'Trading in the Zone is a complete package presented in the form of a book of years of experience by Mark Douglas.

You will not need years to cultivate a positive winning attitude if you diligently work on yourself rather than the markets.

You can buy the book if you are serious to improve your trading skills!

(Amazon paid link)

Guest Post - Written by Mr. Lal Bajaj, Bangalore

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