Trading Axioms And Affirmations

The following information is based on the teachings of Mark Douglas found in his classic book “Trading in the Zone”. 

Mark teaches that the key difference between professional traders and other traders is that they have learned to think and reason in probabilities at a subconscious level.

In doing so they focus on the process of trading and let the outcome take care of itself whereas other traders focus on the outcome and not the process.

Only by truly accepting this information at a subconscious level can we move beyond a state of inconsistency to consistency in our trading.

These should be read aloud before each trading session. It is recommended to close your eyes after each one and meditate on what it really means.

The Five Fundamental Truths of Trading Pertaining to a Probabilistic Environment. 

  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.

The Traders Creed

I am a consistent winner because:

  1. I objectively identify my edges.
  2. I predefine the risk of every trade.
  3. I completely accept the risk or I am willing to let go of the trade.
  4. I act on my edges without reservation or hesitation.
  5. I pay myself as the market makes money available to me.
  6. I continually monitor my susceptibility for making errors.
  7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.

Regarding the secret of trading success, Mark wrote:

If there is such a thing as a secret to the nature of trading, it is this:

At the very core of one’s ability, you must learn to,

  1. Trade without fear or overconfidence.
  2. Perceive what the market is offering from its – neutral – perspective.
  3. Stay completely focused on the “now moment opportunity flow”.
  4. Spontaneously enter into the ‘zone’, it is a strong and virtually unshakeable belief in an uncertain outcome with an edge in your favor.

When you are operating at this level you have become the casino.