Mark Douglas

[asiatrader98]

Blaming the market
“The point is, if you have ever found yourself blaming the market or feeling betrayed, then you have not given enough consideration to the implications of what it means to play a zero-sum game. Any degree of blaming means you have not accepted the reality that the market owes you nothing, regardless of what you want or think or how much effort you put into your trading.” [-X

– Mark Douglas, Trading in the Zone

[asiatrader98]

The Disciplined Trader: Developing Winning Attitudes    
"Emotions kill successful trading."

[turtle]

Not fair. Your sifu looks more handsome than mine ...  =D>

[Maxforce]

Very few people who go into trading start out with appropriate beliefs and attitudes about responsibility and risk. There are some who do, but it's rare. Everyone else go through the same cycle I described in the example of a novice trader: We start out carefree, then become scared, and our fears continually dimish our potential. The traders who break through this cycle and ultimately make it are the ones who eventually learn to stop avoiding and start embracing the responsibility and the risk.
Most of those who successfully break the cycle don't make the shift in thinking until they have experienced so much pain from large losses that it has the positive effect of stripping away their illusions about the nature of trading. With respect to your development, the how of their transformation is not that important, because in most cases it happened inadvertantly. In other words, they weren't completely aware of the shifts that were taking place inside their mental environment until they experienced the positive effects their new perspective had on ways in which they interacted with the market. This is why very few top traders can really explain what accounts for their success, except to speak in axioms like "cut your losses" and "go with the flow"

[Maxforce]

But being aware of something doesn't automatically make it a functional part of who you are. Awareness is not necessarily a belief. You can't assume that learning about something new and agreeing with it is the same as believing it at a level where you can act on it.

[Maxforce]

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.

[Maxforce]

If there is such a thing as a secret to the nature of trading, this is it: At the very core of one's ability
1) to trade without fear or overconfidence
2) perceive what the market is offering from its perspective
3) stay completely focused in the "now moment opportunity flow"; and
4) spontaneously enter the "zone", it is a strong virtually unshakeable belief in an uncertain outcome with an edge in your favor.

The best traders have evolved to the point where they believe, without a shred of doubt or internal conflict, that "anything can happen"

[Maxforce]

The essence of what it means to be in "the zone" is that your mind and the market are in sync. As a result, you sense what the market is about to do as if there are no separation between yourself and the collective consciousness of everyone else participating in the market. The zone is a mental space where you are doing more than just reading the collective mind, you are also in complete harmony with it. If this sounds strange to you, ask yourself how is it that a flock of birds or a school of fish can change direction simulteneously.

[Maxforce]

Very few people who decide to trade ever take the time or expend the effort to think about what it means to be a trader. Most people who do into trading think that being a trader is synonymous with being a good market analyst.

[Maxforce]

Several years ago, a trader came to me for help. He was an excellent market analyst; in fact, he was one of the best I ve ever met. But after years of frusfration during which he lost all his money and a lot of other people's money, he was finally ready to admit that, as a trader, he left a lot to be desired. After talking to him for a while, I determine that a number of serious psychological obstacles were preventing him from being successful.
One of the most troublesome obstacles was that he was a know-it-all and extremely arrogant, making it impossible for him to achieve the degree of flexibility required to trade effectively. It didn't matter how good an analyst he was.

Unquote. My personal comment as below:
Maybe this is why people often say, "Great traders react rather than predict"

[Maxforce]

Hmm since asiatrader's picture somehow not showing, here s Mark Douglas

[Maxforce]

Here's one stroy from Mark Douglas that emphasize on the point of anything can happen and we also learn there is no holy grail.

Scenario: A chairman of a brokerage (and successful trader) sat down with an established technical analyst watching the soybean market together. The analyst was explaining the term support and resistance using a reliable method developed by Drummond.

As they sat there, the bean market was slowly trending down to the price the analyst said would be the support, or low, of the day. When it finally got there, the chairman looked over to the analyst and said, "This is where the market supposed to stop and go higher right?"
The analyst responded, "Absolutely! This is the low of the day."
"Thats bullsh-it!!!" the chairman retorted. "Watch this."
He picked up the phone, called one of the clerks handling orders for the soybean pit, and said, "Sell two million bushels at the market"
Within 30 seconds after he placed the order, soybean market dropped 10 cents a bushel.

The chairman turned to look at the horrified expression of the analyst's face.
Calmly he asked, "Now where did you say the market was going to stop? If I can do that, anyone can"

Unquote. My personal comment below:
Perhaps this is why Mr Theng said, Never let people know what you know.
Big boys, once they know how we read the charts, will manipulate for their own use.
Maybe this is why many methods no longer work once they become publicised. In the book of Intelligent Investor, by Benjamin Graham, it did criticise a book that was published with the title "What works on Wall Street" (or something to the effect). Suggested title was "What USED TO work on Wall Street UNTIL THIS BOOK IS PUBLISHED"

[Maxforce]

Here's what makes thinking in probabilities so difficult.
It requires two layers of beliefs that on the surface seem to contradict each other.
We call the first layer the micro level. At this level, you have to believe in the uncertainty and unpredictability of each individual hand.
The second layer is the macro level. At this level, you have to believe the outcome of a series of hand played is relatively certain and predictable.

[Maxforce]

They stay relaxed because they are committed and willing to let their probabilities (their edges) play themselves out, all the while knowing that if their edges are good enough and the sample sizes are big enough, they will come out net winners.

[Maxforce]

Traders who have learned to think in probabilities are confident of their overall success, because they commit themselves to taking every trade that conforms to their definition of an edge.
They don't attempt to pick and choose the edges they think, assume, or believe are going to work and act on those; nor do they avoid the edges that for whatever reason they think, assume, or believe aren't going to work. If they did either of those things, they would be contradicting their beliefs that the "now" moment is always unique, creating a random distribution between wins and losses on any given string of edges.
They have learned, usually quite painfully, that they don't know in advance which edges are going to work and which ones aren't. They have stopped trying to predict outcomes. They have found that by taking every edge they use ample opportunity to play itself out in their favor, just like the casino.

On the other hand, why do you think unsuccessful traders are obsessed with market analysis. They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is deperately trying to create certainty where it just doesn't exist.

The irony is that if he completely accepted the fact that certainty does not exist, he would create the certainty he craves.

Unquote. My personal comments as below:
Such problem happens to me and is evidenced by my previous article about trader's judgement and mechanical systems. I cherry pick, instead of taking all trades that my system prompts me too. And cherry picking appears to pick many non cherries.
And also, I have always said and try to distinguish traders and gamblers. This is also a mistake. Ben and Seng were most right when they said traders are gamblers in a sense. But as there are many levels of traders similar to gamblers.
And also, perhaps, this is why Mr Theng has never said that CI or any counter will definitely go any specific direction. He uses "maybe" to give an indication of what the market wants to do which is more superior than any half-assed guesswork on the market which is never certain.