Thread by @TraderLion_

Trading is 95% mental (maybe even more).

That's why Mark Douglas' work was so transformative for traders of all markets — it's not just about TA. To be successful, you have to focus on the mental side of trading.

Here are 15 of his top quotes on trading psychology (save this):

1. "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."

Instead, you should be focused entirely on how your mind works.

2. "Confidence comes when you trust yourself to act in your best interest."

You know you make common, avoidable mistakes.

The only way to build true confidence is creating mental processes to stop you from making them in the first place.

3. "You don’t need to know what’s going to happen next to make money."

Making money comes down to executing an edge, over and over again, over a large series of trades.

Nothing else.

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

Too often traders miss out on A+ trades because they're too afraid to take losses.

Stop worrying about what "could happen" and execute.

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

6. "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."

It's time to stop attaching a 'right' or 'wrong' label to each one of your trades.

7. "The degree to which you think you know, assume you know, or in any way need to know what is going to happen next is equal to the degree to which you will fail as a trader."

Need to know more? You'll fail more.

Need to know less? You'll succeed more.

8. "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."

This is one of the main differences between gambling and trading — as a retail trader, you don't have to play every setup or day to make money.

Execute when your edge is present, and sit out when it isn't.

9. "The consistency you seek is in your mind, not in the markets."

Change is the only thing that's constant in the markets.

But, you can find consistency in your thought patterns, habits, and executions if you prioritize them.

This is how to win at trading.

10. "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."

11. "Market analysis will not solve the problems created by a lack of discipline and confidence."

It doesn't matter how 'right' you are on a move, if you don't have the discipline & confidence to trade your analysis, you'll never make money.

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."

The only way to avoid system hopping (especially on a losing streak) is to already have done a deep dive.

You must know the ins & outs of your strategy — how many losses in a row is normal, what environment the strategy works/doesn't work in, etc.

Most trades find something on X and think they can replicate it instantly. Not how it works...

13. "The market is a boundary-less environment; your mental structure must impose the rules and discipline needed to thrive."

That's what makes it so difficult for the majority — it is completely random, and to succeed, your trading must be structured.

14. "When you define your risk in advance, you acknowledge the possibility of being wrong. Without this, traders rationalize, justify, or avoid decisions, leading to losses."

Before entering, you must always know where you're going to get out if the trade goes against you.

15. "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."

It takes time to become a successful trader — but the more work you put in, the shorter your learning curve.

And one more for you...

Mark Douglas' 5 Fundamental Truths:

1. Anything can happen.

2. You don’t need to know what is going to happen next in order to make money.

3. There is a random distribution between wins and losses for any given set of variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another.

5. Every moment in the market is unique.

🔥

Boom! That's it.

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