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Chapter Fifteen
Mark Douglas:
Minding Yourself before the Trade |
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Mark Douglas is an author and trading coach. His book, The Disciplined Trader, is a must-read for any trader. Mark and I both attended Michigan State University. His clients include Chicago's top pit traders. |
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Neal: Mark, what is the most important skill a trader can develop? |
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Mark: The most fundamental skill a trader can acquire is the ability to truly accept the risks inherent in trading. The markets display collective behavior patterns that have statistically reliable outcomes. But the outcome of each individual pattern is probable. Winning is not assured; there is definitely a risk of losing money and being wrong. |
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The problem is that most traders erroneously assume that because they put on and take off trades, they must also be risk-takers. For the vast majority of traders (in fact, all but the best), this couldn't be further from the truth. Yes, it is certainly true that trading is risky. And if you put on and take off a trade, you are also taking a risk. However, just because you trade doesn't mean that you have learned how to accept the risk in a way in which you can maintain a confident state of mind and at the same time remain disciplined and focused. There is a huge psy- |
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