The Five Fundamental Truths of Trading

     

         Below Five beliefs that I embedded into my Trading framework. I discovered these essential lesson from Mark Douglas book "Trading In The Zone" which is a must read for any aspiring Trader. Below I will give my insight. 

1.          Anything can happen: The Market is a constant moving  force, it moves in constant motion like a River. As Traders it's our due diligence to adapt our trading in pursuit of success. As Douglas noted "If you believe that anything can happen and that you don't need to know what is going to happen next in-order to make money, then you will always be right." Most Traders believe that you need to know what is going to happen next. This always get my head spinning, how Traders will try to predict the future. That is like saying you can read the minds of other traders participating in the exact trade. Which is nonsense. Once I integrated this belief into my Trading I notice an immediate relief. As before I was expecting a stock to move in certain trend. Whereas now I am in harmony with any possible outcome. In Summary, having Zero Expectations simply means accepting any possible outcome. I would strongly encourage you to reading "Trading In The Zone" for any additional questions. 
2.           You don't need to know what is going to happen next in-order to make Money: As I previously noted trying to predict any outcome from the Market will lead to unfulfilled expectations. Nothing can be more harmful than an unfulfilled expectations. Which is why Having ZERO exceptions is the best option, but sadly not an option for most. I let the Markets come to me, I am not looking to Trade. For example, think of yourself as a Retired Trader. You will only come out of retirement when there is a perfect set-up you couldn't afford too miss. We'll how do you know when the ideal set-up occurs? That will come with great immersion with the Markets, and in search of your edge. This is a hard concept for most to fully understand, but it can be mastered overtime. Practice Makes Progress. 
3.            There is a Random distribution between wins and losses for any given set of variables that define an edge: Successful Traders track their trades religiously. You will gain the most knowledge from Tracking your Trades. In my opinion, a loss in never really a loss unless you gain something from that loss. Like flipping a coin. Heads or Tails right. A loss puts you much closer to a win, and vice verse. 
4.            An edge is nothing more than an indication of higher probability of one happening over another: Trading is not an exact science. I have various spreadsheets tracking different patterns in-order to give me a sort of edge. Does this mean I will be consistently profitable ? The answer is No, simply because Trading is not a direct Cause & Effect. I play the odds, as If I were to flip a coin. 
5.             Every moment is the Market is unique:   The Market is a constant moving force. As Traders it's our due diligence to adapt. Currently the week of December 21, 2018, the overall Markets finished its worst week since 2008 financial crisis. Investors along with Traders are loosing their entire accounts. I constantly remind myself staying 100% liquid is an option, but sadly not an option for degenerate gamblers. Cash is King. We are in a midst of a Bear Market, which I was warned about from my Guru https://profit.ly/guru/timothysykes?aff=11677 .  There will still be opportunities in the Markets, but the safest trade is NO TRADE.  As Douglas noted " What separates the best traders from the all the rest is that they have trained their minds to believe in the uniqueness of each moment." Those who accept the uniqueness of each moment "the lower your potential to associate." The less you associate "the more open your mind will be to perceive what the market is offering you from its perspective."  Adapting to the uniqueness of Markets is a constant struggle for Traders simply, because of their lack of Preparation and Knowledge. As the great Charles Darwin said " It is not the strongest species that survives, nor the most intelligent, but the most responsive to change." I look forward to what the Market will offer us in future. 

   




Douglas , Mark. Trading In The Zone . New York Institute of Finance .