"The Disciplined Trader" - "The Steps to Success"

This is a summary of the "Steps to Success" in Chapter 16 of Mark Douglas' book "The Disciplined Trader: Developing Winning Attitudes". I read this summary daily to properly focus my mind before the trading day begins.

The Disciplined Trader

STAY FOCUSED ON WHAT YOU NEED TO LEARN

Focus on Market Structure rather than money.

There is nothing worse than missing a “Perfect” opportunity; however, there really isn’t anything to miss as long as price keeps changing, there will always be another opportunity.

DEALING WITH LOSSES

Predefine what a loss is in every potential trade

Execute your losing trades immediately upon perception that they exist.

BECOME AN EXPERT AT JUST ONE MARKET BEHAVIOR

Let other opportunities pass.

Release anxiety to trade too often

Eliminate the psychological damage of fear. The trader’s past mistakes will generate so much fear that he won’t be able to execute his trades properly or at all.

Perception and execution of opportunities are separate skills. They can and do work in tandem if there are no mental components blocking execution.

LEARN HOW TO EXECUTE A TRADING SYSTEM FLAWLESSLY

There is no guaranteed income in trading.

Patterns that repeated in the past may not repeat in the future.

Even though all systems have a percentage of losers, do not try to outguess your trading system.


THINK IN PROBABILITIES

“You will want to determine the prevalent beliefs being expressed in the market and how those beliefs will affect price movement. That identification process requires a detached objective perspective, where you are watching and listening to what the market is telling you, instead of being focused on what the market is doing to you personally.”

BE OBJECTIVE

You feel no pressure to do anything, and have no feeling of fear.

You recognize what the market is telling you, and this is what you need to do.

You are not focused on money but on the structure of the market.

MONITOR YOURSELF

Monitor yourself by knowing what you are thinking about and what market information you are focused on.


Charles