Mark Douglas

[Maxforce]

When you're convincing yourself that you re right, what you re saying to yourself is, "I know who's in the market and who's about to come into this market. I know what they believe about what is high and what is low. Furthermore, I know each individual's capacity to act on those beliefs and with this knowledge, I am able to determine how the actions of each of these individuals will affect price movement in its collective form a second, a minute, an hour, a day or a week from now."
Looking at the process of convincing yourself that you're right from this perspective, it seems a bit absurd, doesn't it?

Unquote. My personal note as follows:
Hence, it is easy to spot a newbie in trading. The one who speaks a lot and seemed to know the market direction. The market according to them must move in a specific direction.

[Maxforce]

We have to be rigid in our rules and flexible in our expectations. We need to be rigid our rules so that we gain a sense of self-trust that can, and will always, protect us in an environment that has few, if any boundaries. We need to be flexible in our expectations so we can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to us from its perspective. At this point, it probably goes without saying that the typical trader does just the opposite: He is flexible in his own rules and rigid in his expectations. Interestingly enough, the more rigid the expectation, the more he has to either bend, violate or break his rules in order to accommodate his unwillingness to give up what he wants in favor of what the market is offerring.

[Maxforce]

A probabilistic mindset pertaining to trading consists of five 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

[Maxforce]

The best traders are in the "now moment" because there's no stress. There is no stress because there is nothing at risk other than the amount of money they are willing to spend on a trade. They are not trying to be right or trying to avoid being wrong; neither are they trying to prove anything. If and when the market tells them that their edges aren't working or that it's time to take profits, their minds do nothing to block this information. They completely accept what the market is offering them and they wait for the next edge

[Maxforce]

We can "know" that we have a specific plan as to how we are going to take profits if a trade works. But that's it. If what we think we know starts expanding to what the market is going to do, we're in trouble. And all that's required to put us into a negatively charged, "I know what to expect from the market" state of mind is for any belief, memory or attitude to cause us to interpret the up and down tics of any market information as anything but an opportunity to do something on our own behalf.

[Maxforce]

Putting a winning trade or even a series of winning trades requires absolutely no skill. On the other hand, creating consistent results and being able to keep what we've created does require skill. Making money consistently is a by-product of acquiring and mastering certain mental skills. The degree to which you understand this is the same degree to which you will stop focusing on the money and focus instead on how you can use your trading as a tool to master these skills.

[Maxforce]

Consistency is the result of a carefree, objective state of mind, where we are making ourselves available to perceive and act upon whatever the market is offerring us (from its perspective) in any given "now moment"

Carefree means confident, but not euphoric. When you are in a carefree state of mind, you won't feel any fear, hesitation or compulsion to do anything, because you ve effectively eliminated the potential to define and interprete market information as threatening. To remove the sense of threat, you have to accept the risk completely. When you have accepted the risk, you will be at peace with any outcome. To be at peace with any outcome, you must reconcile anything in your mental environment that conflicts with the five fundamental truths about the market. What's more, you also have integrate these truths into your mental system as core beliefs.

Making yourself available means trading from the perspective that you have nothing to prove. You aren't trying to win or to avoid losing. You aren't trying to get your money back or to take revenge on the market. In other words, you come to the market with no agenda other than to let it unfold in any way it chooses and to be in the best state of mind to recognise and take advantage of the opportunities it makes available to you.

Trading in the now moment means that there is no potential to associate an opportunity to get into, get out of, add to, or detract from a trade with a past experience that already exists in your mental environment.

[Maxforce]

There are three characteristics you need to understand in order to effectively install the fundamental truths about trading at a functional level in your mental environment:
1. Beliefs seem to take a life of their own and therefore, resist any force that would alter their present form.
2. All active beliefs demand expression.
3. Beliefs keep on working regardless of whether or not we are consciously aware of their existence in our mental environment

[Maxforce]

There are three stages of development of a trader:
The first stage is the mechanical stage. In this stage you
1. Build the self-trust necessary to operate in an unlimited environment.
2. Learn to flawlessly execute a trading system.
3. Train your mind to think in probabilities (the five fundamental truths).
4. Create a strong, unshakeable belief in your consistency as a trader.

The second stage is the subjective stage of trading. In this stage you use anything you have ever learned about the nature of market movement to do whatever it is that you want to do. There's a lot of freedom in this stage, so you will have to learn how to monitor your susceptibility to make the kind of trading errors that are the result of any unresolved self-valuation issues.

The third stage is the intuitive stage. Trading intuitively is the most advanced stage of development. You cannot try to be intuitive because intuition is spontaneous. It does not come from what we know at a rational level. Sensing that something is about to happen is a form of knowing that is very different from anything we know rationally.

[Maxforce]

The seven principles of consistency:
1. Objectively identify your edges.
2. Predefine the risk of every trade.
3. Completely accept the risk and be willing to let go of the trade.
4. Act on your edges without reservations or hesitation.
5. Pay yourself as the market makes money available to you.
6. Continually monitor the susceptibility for making errors.
7. Understand the absolute necessity of these principles of consistent success and therefore NEVER violate them.

[SleepWalk]

Douglas say in his book:-
trading result is the function of 3 skills:-
1, ability to perceive opportunity
2, ability to execute a trade
3, ability to grow your account over time.

i do not understand why 3rd one is necessory, since skill 1 and 2 will lead to 3. 

[Maxforce]

Skill 3 relates to consistency and persistence of psychology

[lsblmllms]

Swalk, when u make big money, u sleepwalk and lose big money. Back to square 1 if ur lucky and wake up in time. 1 & 2 do not lead to 3, discipline does.

[Doom]

Richard Dennis proved that with a simple set of rules, he could take people with little or no trading experience and make them excellent traders

Turtle Trader

[Maxforce]

Most people have trouble following instructions - thats true at work
and in trading, most have trouble following their own system