Mark Douglas on Emotionless Trading

[dbphoenix]

Not sure who you referring to... please refrain lecturing others and placing yourself continually on a pedestal, (we already know modesty is not your forte and I wonder why) ... words in trading mean not much.

Read the book many times, it an excellent book but it will not deliver because it lacks of a complete vision which is the fundamental force behind a shift in mental structure, in theory it makes sense but in practice is wobbly as his idea to take partial profit quickly......

What trading plan did you develop as a result of having studied the book?

Db

 

[lucie_fxtrader]

Trading is all about having a strategy and sticking to it if it works. Not playing any games, mixing trading with emotions. The best traders have very simple strategies and they have no emotions.

Does it make sense Lucie m?

It does thank you But how can a trader achieve having no emotions?

 

[dbphoenix]

Interesting. Would you agree that the less experienced a trader is the more emotional he/she is while trading?

That depends to a large extent on the emotional baggage that one brings to his trading ventures. Young children make excellent traders largely because they have no ego invested in what they do. They also are far better at reading charts, perhaps for the same reason.

Be that as it may, experience in and of itself does not necessarily translate into emotionless trading, especially if one has no plan such as that which I've mentioned. In fact, engaging in the same unproductive process again and again translates into a greater degree of emotional trading, not less. But you will nonetheless encounter the advice from "experienced traders" that you must immerse yourself in it, preferably with real money, and just keep at it until "things turn around". And people will do so. For years. Does that make sense? On the face of it, no. But there are reasons for it, chiefly the "superiority bias".

Db

 

[dbphoenix]

It does thank you But how can a trader achieve having no emotions?

That, again, is pretty much what TITZ is all about. The only reason to be emotional about one's trading is that one has something to be emotional about. Unless and until one determines just what that is, he will continue to sabotage his own efforts.

If you're interested, read an article I wrote on fear. It's not long

Db

 

[ffsear]

I prefer the "Know what you are" approach. It all very well saying "be more disciplined" etc etc....

But I think one of the things that people should focus on and rarely do is their weaknesses. Know your weakness, understand your weakness and how it affects your trading. When you understand your weakness, you can build a trading plan that helps you avoid it.

Simple example. I'm quite impulsive. Having the Buy and Sell buttons staring me in the face all day is just a recepie for disaster. At some point I lose my control and take a trade with know signal, no entry requirement met and so on, and before you know it, a weeks profit is gone. Alternatively the impulsiveness would often lead me to cut winning trades short.

The solution for me was to trade with orders, rather then physically hit the buy/sell button. I'm still trading the same method, looking at the same levels, but now I just set my orders and stops and walk away. I only check the markets only 3 - 4 times a day now. It funny, my biggest profits have always come from trades made while i'm not at my desk!

I've not changed my method, I've just changed the way I trade it and at the same time i've managed to remove one of the biggest problems I had when it came to trading.


Took me almost 10 years to realise that trading is not about changing yourself, its about understanding yourself.

 

[dbphoenix]

I prefer the "Know what you are" approach. It all very well saying "be more disciplined" etc etc....

But I think one of the things that people should focus on and rarely do is their weaknesses. Know your weakness, understand your weakness and how it affects your trading. When you understand your weakness, you can build a trading plan that helps you avoid it.

Simple example. I'm quite impulsive. Having the Buy and Sell buttons staring me in the face all day is just a recepie for disaster. At some point I lose my control and take a trade with know signal, no entry requirement met and so on, and before you know it, a weeks profit is gone. Alternatively the impulsiveness would often lead me to cut winning trades short.

The solution for me was to trade with orders, rather then physically hit the buy/sell button. I'm still trading the same method, looking at the same levels, but now I just set my orders and stops and walk away. I only check the markets only 3 - 4 times a day now. It funny, my biggest profits have always come from trades made while i'm not at my desk!

I've not changed my method, I've just changed the way I trade it and at the same time i've managed to remove one of the biggest problems I had when it came to trading.


Took me almost 10 years to realise that trading is not about changing yourself, its about understanding yourself.

As long as you have the sort of plan I've mentioned, this is not a bad way of going about executing and managing one's trades. In fact, it's the chief reason I encourage people to avoid daytrading and instead trade longer intervals, at least hourly, if not daily (the trade I posted to my journal yesterday is a good example).

As long as the plan is demonstrably good, leaving it the hell alone is often the best choice. "Discipline" doesn't mean chaining oneself to one's computer in an effort to prove to somebody, including oneself, that one can endure the task. "Discipline" simply means trading the plan, without reservations and without hesitation. If that means placing buy- and sell- and cover-stops and walking away, why not?

Db

 

[barjon]

I prefer the "Know what you are" approach. It all very well saying "be more disciplined" etc etc....

But I think one of the things that people should focus on and rarely do is their weaknesses. Know your weakness, understand your weakness and how it affects your trading. When you understand your weakness, you can build a trading plan that helps you avoid it.

Simple example. I'm quite impulsive. Having the Buy and Sell buttons staring me in the face all day is just a recepie for disaster. At some point I lose my control and take a trade with know signal, no entry requirement met and so on, and before you know it, a weeks profit is gone. Alternatively the impulsiveness would often lead me to cut winning trades short.

The solution for me was to trade with orders, rather then physically hit the buy/sell button. I'm still trading the same method, looking at the same levels, but now I just set my orders and stops and walk away. I only check the markets only 3 - 4 times a day now. It funny, my biggest profits have always come from trades made while i'm not at my desk!

I've not changed my method, I've just changed the way I trade it and at the same time i've managed to remove one of the biggest problems I had when it came to trading.


Took me almost 10 years to realise that trading is not about changing yourself, its about understanding yourself.

Ah, you must have read the "Our Jack" article once upon a time then

 

[Fugazsy]

What trading plan did you develop as a result of having studied the book?

Db

Dp

You see what you and Douglas fail to understand is that you cannot resist emotions, you only can ride them: feel their pain, accepting them, give them space, then use their vitality to grow, taking obstacles in life as great opportunities, bypassing your thinking self going towards your observing self....Mindfulness, here effortless springs....

I find the book intriguing and revealing, a great read.

Did it help me to break through? No, it did not, it was like asking me not to think about an apple expecting me not to think about an apple.......

Beside having a plan and strictly following it will not bring any good results if your money management is poor, which goes back to the classic: "cut your losses quickly and make you winners run", opposed to "taking profit quickly" which shows only fear kicking in and the thinking self back in play.

Only me.....of course.

 

[Fugazsy]

I prefer the "Know what you are" approach. It all very well saying "be more disciplined" etc etc....

But I think one of the things that people should focus on and rarely do is their weaknesses. Know your weakness, understand your weakness and how it affects your trading. When you understand your weakness, you can build a trading plan that helps you avoid it.

Simple example. I'm quite impulsive. Having the Buy and Sell buttons staring me in the face all day is just a recepie for disaster. At some point I lose my control and take a trade with know signal, no entry requirement met and so on, and before you know it, a weeks profit is gone. Alternatively the impulsiveness would often lead me to cut winning trades short.

The solution for me was to trade with orders, rather then physically hit the buy/sell button. I'm still trading the same method, looking at the same levels, but now I just set my orders and stops and walk away. I only check the markets only 3 - 4 times a day now. It funny, my biggest profits have always come from trades made while i'm not at my desk!

I've not changed my method, I've just changed the way I trade it and at the same time i've managed to remove one of the biggest problems I had when it came to trading.


Took me almost 10 years to realise that trading is not about changing yourself, its about understanding yourself.

Great honest post.

 

[dbphoenix]

Dp

You see what you and Douglas fail to understand is that you cannot resist emotions, you only can ride them

I disagree. And so would, I assume, Douglas. But no purpose is served by arguing about it, anymore than there is any point to arguing about the existence of a Zen state.

Beside having a plan and strictly following it will not bring any good results if your money management is poor, which goes back to the classic: "cut your losses quickly and make you winners run", opposed to "taking profit quickly" which shows only fear kicking in and the thinking self back in play.

Money management and risk management must of course be part of the plan. Otherwise it's not much of a plan.

Going back to what I said in my article, the chief question when one examines his fears is what exactly it is that he's afraid of. If one doesn't know, he should stop trading, or postpone starting, until he knows the answer. If he doesn't, he will go on month after month, year after year, and never make any progress toward his goals, unless of course his goals are to trade without profit.

Db

 

[dbphoenix]

I don't know why this thread was resurrected after three months, but in answer to the question "how [do] you change your mental structure in a pragmatic way? How do you effective embrace fully that responsibility? By doing what? How do you shift your mental structure?", I suggest that those who are interested look at either my "Developing A Plan" (see my signature) or Tim's "Trading Plan Template" (see his signature).

If one reviews what he has for a plan objectively and notes words like "may," "might," "could," "should," "ought to," "hope," "think," and the most-often-recurring "feel", then he should perhaps review his testing procedures in order to determine just how rigorous they are.

Db

 

[Fugazsy]

I disagree. And so would, I assume, Douglas. But no purpose is served by arguing about it, anymore than there is any point to arguing about the existence of a Zen state.



Money management and risk management must of course be part of the plan. Otherwise it's not much of a plan.

Going back to what I said in my article, the chief question when one examines his fears is what exactly it is that he's afraid of. If one doesn't know, he should stop trading, or postpone starting, until he knows the answer. If he doesn't, he will go on month after month, year after year, and never make any progress toward his goals, unless of course his goals are to trade without profit.

Db

Well...in that case Douglas had not much of a plan.....

No sure what article you talk about....I probably missed that, my fault.

Knowing or trying to understand what you are afraid of is futile exercise in my view, this is were you can really be trapped for 50 years between mirrors of concepts created by your own perception or influenced by others. There is nothing to understand at the conceptual level unless you have a tendency to sadism.

This is not about the Zen state, this is about common sense State, emotions are an essential part of us and they need to be felt otherwise you leave behind a great part of you.

It is life pulsing and calling you for some real action.

Yes, they are not comfortable to bring forward but that is what it is all about, getting out of the comfort zone.....to grow.

Said that, with time they become less uncomfortable and they became only a great opportunity.

Db, I am sorry it seems we do not agree on anything, probably one day we will (you never know your luck), in the mean time I wish you and you family the best for the New Year.

 

[dbphoenix]

Well...in that case Douglas had not much of a plan.....

You must have missed #4: "I act on my edges without reservation or hesitation." You may want to review what he means by "edges" and how to go about developing them.

No sure what article you talk about....I probably missed that, my fault

The article I wrote on fear. I'll provide the link again: *click*

Knowing or trying to understand what you are afraid of is futile exercise in my view, this is were you can really be trapped for 50 years between mirrors of concepts created by your own perception or influenced by others. There is nothing to understand at the conceptual level unless you have a tendency to sadism.

What we believe to be impossible will be impossible for ourselves, but that doesn't mean that it will be impossible for everyone. If one does not address one's fears, particularly the causes of them, they will not evaporate on their own, and the trader will waste years trying to "control" them.

One has a choice, then, between short-term, acute pain, and long-term if not perpetual chronic pain. The former choice can lead to an emotionless state and consistent profits, assuming one develops an edge. The latter choice does not. The latter instead leads to years of trying.

I wish you and you family the best for the New Year.

Ditto.

Db