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Mark Douglas - Mind over Market

Discussion in 'Trading/Investing Resources' started by Gringotts Bank, Apr 5, 2016.

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  1. Gringotts Bank

    Gringotts Bank

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    Was one of the best, and best-known trading psych coaches.

    Basically he has one point which he hammers home repetitively. But it's a good point. Bit different to Steenbarger who can create a feeling of overload with the sheer volume of stuff.

    https://www.youtube.com/watch?v=GhKJ9P3agRc
     
  2. Wysiwyg

    Wysiwyg Everyone wants money

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    He says we need to stay focussed on the process of trading to do "exactly what we need to do, when we need to do it without hesitation, reservation or fear".
    "The ability to do or not do some things the method itself can't help us with." True, the method cannot see or hear the present time or pre market activity. For instance an extreme event or left field news that tanks the market would require a dump immediately whereas a method would not see that till after the price action.

    What he is saying is pull the trigger when the (proven?) method indicates.
     
  3. Gringotts Bank

    Gringotts Bank

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    He's saying: Have a method with some sort of proven or unproven edge, then be like a casino and just mechanically conduct trade after trade without fear. Trust the system even if it's unproven because if you don't trust it, then you're afraid. [Fear has been shown to cause massive deterioration to decision making skills in experimental studies].

    Analyze the trade list afterwards.
     
  4. DeepState

    DeepState Multi-Strategy, Quant and Fundamental

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    This is a very curious statement.

    If a method has no proven edge, which is highly likely if the standard required for initiating any trading is zero, shouldn't you trade with extreme fear? Because, if you have no edge, but the broker/casino takes a clip every time you step in....the broker/casino wants a trader to trade like the BSD they really want to be if it weren't for their well formed sense of fear. That's not a good thing for the BSD in training with an unproven edge or whose proof of an edge is somewhat wanting. For the remaining 1%, then fine.

    Didn't we evolve the sense of fear for a reason....like staying alive?

    There certainly is a very large market for books, courses, medicines, psychology and such for overcoming anxiety. My personal view is that it should be focused on unhelpful anxiety. Anxiety is perfectly fine when putting your money at risk with negative edge.

    The best way to make it rich with negative edge is to make one mother-of-all trades bet with zero fear and maximal endorphins. Naturally, this is also the surest way to go out the back door. Also, naturally, you will only hear of the winners who conquered their fear and bet the farm with no edge. Conquest of fear thus becomes a money making concept on a stand-alone basis. Awaken the Giant Within (Pretty good book, actually).
     
  5. Gringotts Bank

    Gringotts Bank

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    Say a discretionary trader uses the turn up of the MA for long entry. So long as the market is uptrending over longer time frames, this is a reasonable "method", because there's an extremely high chance of getting one or more profitable trades during the session.

    Obviously if you backtested "MA turn up in uptrending market", it would be a flat/losing strategy. So the discretionary element is what you use to choose which instances to trade. For someone who is practised at watching millions of MA turn ups, he may develop the ability to tell which ones will profit, and which won't. If there's fear, decision making can be totally messed up. If there's no fear, the process should turn profitable. I've seen this in my own attempts as discr. trading. It rings true for me.

    cheers
     
  6. Quant

    Quant

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    Lots Gush over Douglas but i must say im not a huge fan tbh , **** in = **** out and all the head tuning in the world wont fix that .. Positive expectancy leads to a positive mindset not the other way around . Method is #1 and that is measured by expectancy , many people buy these trading in the zone type books thinking thats their fix but to be honest method based on empirically tested rules based systems are the path to successful trading not tony robbins positive reinforcement ... ive said it and already regret it
     
  7. Gringotts Bank

    Gringotts Bank

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    I know all about systems trading and expectancy. I currently trade 3 systems successfully.

    Do you know anything about psychology? Or are you someone who hears the word and equates it with hyped-up American motivational speakers?
     
  8. ThingyMajiggy

    ThingyMajiggy

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    Agreed. I have never been a fan of Douglas. Brett Steenbarger is much better IMO if I had to read a trader/psychologist's work. But you aren't going to be profitable by just reading about psychology.

    Skills first, then psychology, you need something to be positive about. Psychology definitely helps, but only after you have positive expectancy and know you have the skills to be profitable.
     
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