Today, Mex Group recommends a good book to everyone - "Trading in the Zone". The author Mark Douglas (Mark Douglas) is one of the few senior trading psychology counselors. His books usually reveal the secrets of successful trading and eliminate many unpredictable factors, so they are highly respected.
Whether you are a novice in the stock market or a veteran of stock trading, if you want to make consistent profits in the financial market, you should read this book on the psychology of stock trading, it will make you detached Losers reincarnate, become market winners! Of course, in addition to the stock market, it is also useful for other financial markets. For example, speculating on coins.
Mark Douglas has trained countless traders throughout his life, and his trading attitude and advice are very refined. If you want to achieve consistent profitability in your trading career, then take seriously the following trading rules that he values most:
one. Closing the "profit gap" is what needs to be done. There is a word often mentioned in the book called "profit gap". It refers to the gap between the profit that may be obtained by following the trading method and the profit you actually obtain. Traders usually have high expectations for trading, and they hope to obtain continuous profits from trading in order to "trade for a living". However, unless your trading method is very efficient and you are very principled, most people will experience the "profit gap". Traders are always trying to learn the market, change their approach, and spend more time in front of the computer. However, Mark Douglas has always emphasized that what they really need to change is themselves, understanding themselves, and how to interact with the market. They need "necessary psychological skills" to bridge the "earnings gap".
two. Being profitable and being a profitable trader are two different things. Anyone, even a small child, who is lucky enough to open a trading platform and click a few buttons will have the opportunity to be profitable. "Profit is so easy", this is the beginning of many trading careers. However, they will soon find that money is lost faster than profits. And a profitable trader will understand: the result of each transaction is unpredictable, only after the transaction is over, profit or loss will become a fact. In trading, you should not be affected by the traders' own expectations and emotions. Only when you focus on the overall situation, you will not be too concerned about any transaction, so that you can withdraw your emotions.
three. Psychological skills are the key to trading. Psychological skills include: attaching importance to process and methods, not worrying about trading results, controlling emotions and so on. Mark Douglas insists that even with the best technical analysis and execution, long-term profitability is difficult to achieve if your psychological skills are not good enough. You can't suppress your emotions, you can't look at the market objectively, and once the market changes, it is difficult for you to convince yourself to get out in time.
Four. The price analysis mode is not any kind of technical analysis method used to predict the market, such as price trends, etc., will not tell you what will happen to the market in the future. In the author's opinion, these analytical methods only help to increase the profitability of a series of transactions. The outcome of each transaction is random, this is the nature of the transaction. You can never know the result in advance by any means. Price analysis also just tells you what the market was like in the past and the present.
five. Accepting the randomness of the trading results makes the trading more durable. This sounds a bit contradictory, but let's look at another example. For example, in a casino, relative to every gambler, the casino’s profit advantage must be greater, but it is undeniable that there will always be some lucky or skilled gamblers who have taken a large sum of money from the casino. But will this have an impact on the casino's long-term profitability? It doesn't. The advantage of skill that the casino uses is sure to make it a bigger winner. The same goes for transactions. The randomness of trading does not affect your long-term profitability, and the technical methods and models you have mastered will always be your advantage.
six. Thinking about the probability of profit, rather than the expectation of profit, should be the point that Mark Douglas wants traders to focus on most, that is, thinking about the probability of profit. The trading results are random, so think about the probability of profit, and do not expect each transaction, so that traders can maintain an objective attitude to analyze. For example, in the game of flipping a coin, you know by calculation that the probability of the "head" side is 70%, but this is only a possible probability, and the result is difficult to appear as you expected.
seven. Be alert to changes in market sentiment Often traders forget that all prices in the market are driven by participants. Price fluctuations actually reflect the expectations or forecasts of all market participants, who in turn analyze market prices. People are constantly entering or exiting the market, thus forming market fluctuations and causing unexpected results in transactions. If you are long a trade, someone else will be short as well, which makes the outcome more random. These are out of your control. Your trading strategy only increases the probability of your success in a series of transactions, it cannot guarantee the outcome of each transaction.
eight. Change your perception of the market: learn to be a professional trader. Professional traders know that human factors in the market are uncontrollable, and a transaction is likely to show negative results. They think more about risk: "If the market is not good for me, how much risk am I willing to take?" low.
Nine. Simulated trading teaches you how to think about whether you are always profitable in simulated trading, but lose money at the beginning of real trading? This doesn't just happen to one person, it's the norm for most traders. This is because, demo accounts do not involve their own funds, and traders usually do not have many emotional swings. They naturally focus on market movements. And that's the most important part of trading. If you can't understand your large losses, then go back to the demo account and pay attention to your mental state. Because that's what real trading needs.
ten. Choose a transaction with a high probability of profit Mark Douglas said: "The first thing a trader needs to learn is how to increase his probability of profit." In other words, you need to learn to choose a trading opportunity with a high probability. But remember, a trade with a high probability of winning means a series of trades in which the number of winners is greater than the number of losers. A high probability of profit does not guarantee that you will eventually achieve profitability. To achieve this goal, you also need the necessary psychological skills
Finally, MEX GROUP’s advice to everyone is: Whether you are a novice in the stock market or a veteran of stock trading, if you want to make consistent profits in the stock market, you should read this book about the psychology of stock trading The book, it will let you transcend the cycle of losers and promote you to be a winner in the market. You will find that Mark Douglas is a long-term winner because of the following beliefs: I objectively see my strengths. I define the risk of each transaction in advance. I fully accept the risk and am willing to walk away from the trade. I act on my own merits without reservation or hesitation. When the market makes me money, I reward myself. I constantly examine the possibility of my mistakes. I understand that these principles of long-term success are absolutely necessary, so I have never violated them.
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