Thread by @TraderLion_

When it comes to Trading Psychology, Mark Douglas is one of the best.

Here are 20 lessons from Mark that will help you conquer the mental side of trading. 👇

🧵

“If your goal is to trade like a professional and be a consistent winner, then you must start from the premise that the solutions are in your mind and not in the market."

Traders blame the markets for their shortcomings but don't realize that they often are the problem.

1/

"When you achieve complete acceptance of the uncertainty of each edge and the uniqueness of each moment, your frustration with trading will end.”

Each trade has an uncertain outcome. Each moment is unique. Accepting this will reduce your frustrations.

2/

“When you genuinely accept the risks, you will be at peace with any outcome.”

Accepting your risk while making decisions in the markets will reduce your frustration when things don't go your way.

3/

There are 5 Fundamental Truths when it comes to trading. You must understand and internalize these to be successful in the markets 🧠

4/

“When you really believe that trading is simply a probability game, concepts like right or wrong or win or lose no longer have the same significance."

If your goal is performance in the markets, it is 🔑 to understand that being 'right' does you no good.

5/

"If you can learn to create a state of mind that is not affected by the market’s behavior, the struggle will cease to exist.”

Letting go of control is the first step to finding peace. ☮️

6/

“The consistency you seek is in your mind, not in the markets.”

Every outcome in the market is random. The one place we find consistency is in our routines, which begin in our minds.

7/

“Remember, the best traders think in a number of unique ways. They have acquired a mental structure that allows them to trade without fear and, at the same time, keeps them from becoming reckless and committing fear-based errors.”

Rational action stems from a clear🧠

8/

“If you asked me to distill trading down to its simplest form, I would say that it is a pattern recognition numbers game. We use market analysis to identify patterns, define the risk, and determine when to take profits. The trade either works or it doesn’t.”

9/

“Why do casinos make consistent money on an event that has a random outcome? Because they know that over a series of events, the odds are in their favor. They also know that to realize the benefits of the favorable odds, they have to participate in every event.”

10/

“The hard, cold reality of trading is that every trade has an uncertain outcome.”

We don't know what will happen next, and this is our biggest edge in the markets.

11/

“What separates the “consistently great” athletes and performers from everyone else is their distinct lack of fear of making a mistake.”

Accepting the idea that you will make mistakes allows your brain to relax and move on to the next trade when you do make a mistake.

12/

“Rarely will the typical trader stay with his system beyond two or three losses in a row, and taking two or three losses in a row is a very common occurrence for most trading systems.”

Consistency in process, through good times & bad, will separate you from everyone else.

13/

“When I put on a trade, all I expect is that something will happen.”

Removing expectations allows us to be at peace with whatever happens in the market. Friction occurs when something doesn't go to our expectations, ultimately hurting performance.

14/

“No man ever reached to excellence in any one art or profession without having passed through the slow and painful process of study and preparation.”

Trading is a marathon, not a sprint. The best things take time. 🕰️

15/

"If you can't master your mind on a consistent basis, you won't reap profits from the market on a consistent basis."

16/

“Good market analysis can certainly contribute to and play a supporting role in one’s success, but it doesn’t deserve the attention and importance most traders mistakenly attach to it.”

To achieve real success in the markets, our focus must first be on our minds.

17/

Here are two trading rules that Douglas believed were non-negotiable ⬇️

18/

"Profitable traders know that every outcome is random and that anything can happen at any time in the markets. This is what separates them from 'normal' traders."

19/

“It’s the ability to believe in the unpredictability of the game at the micro-level and simultaneously believe in the predictability of the game at the macro level that makes the casino and the professional gambler effective and successful at what they do.”

20/

The main takeaway from this thread is that to become successful in trading, we must understand how our minds work.

If you want a more in-depth look into Douglas' work, here are the links to two of Mark's best books 📕📗

amzn.to/3K7DqRv

amzn.to/3K8gx06

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Let us know what your favorite quote/concept from Douglas is and how you implement it in your trading/investing! 🔽

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