One of two essential reads when either entering the world of trading or as an old hand. In my view traders spend 90% of their time crafting their strategy and next to nothing on the psychology side . Without a steady mindset even the best strategy is certain to fail. The other great read is Reminiscences of a Stock Operator. Great story , ultimately could have done with reading Trading in the Zone I think !
THE COMMENT : Trading is about your ability to deal with your own emotions and keep them under control, this is a great book to help you understand and prepare to do exactly that. Hiranjgarbh K K Missier
If you are like most people, after your first few losing trades you set about to learn better market analysis. After your next string of losers you learned about risk management. But there's still one more challenge to conquer; yourself.
That is the major premise of this book. If it sounds like wishy-washy psycho-babble to you, I'll only say that I would have agreed -- four months ago, before I quit my 20-year technology career, obtained a Series/7 license and joined a professional day-trading firm. I now believe most people would lose money if you gave them 50/50 odds on whether or not it was going to rain tomorrow.
In other words, successfully forecasting the market is not enough. Why not? Well, this book explains why not. It has to do with one's sense of self-worth, one's moral judgment of money, one's work-ethic, one's tendency to focus on good news while ignoring bad, and other things.
"Zone" was recommended to a friend of mine by a professional floor trader who told him, "I wish I had read it before starting two years ago. Don't place another trade until you do." Well said. Does this apply to investors as well as traders? Oh, absolutely! If you have ever said to yourself, "I'm not selling that stock while it's down, I'll wait until I have a profit in it," then for the love of money, read this book.
Finally, read "Zone" before Douglas' earlier work. If you still want more then read "Disciplined Trader" for a general review plus a deeper exploration into the author's philosophical and meta-physical theories
This is a book I highly recommend everyone reads. Even though at times it seems redudant some some would say, I still think that reading it briefly once a year really helps you to remember the big picture in trading which is to be disciplined and to only trade when you know what your "edge" is.
What is it about?
Trading in the Zone (TITZ) is about the psychology of trading. It is widely considered as one of the "must reads".
The Good bits:
The salient points in TITZ are wholly relevant to anyone embarking upon, or intent on maintaining, a succesful career in the role of speculator. The author succesfully described the various flaws in thinking that can work against a trader and cause him to act in a manner at odds with his objective.
The Bad bits:
TITZ contains one or two key points. The delivery of these two points, however, is pretty dreadful. The important points that he does make are repeated again and again and again. It beggars belief.
At one point, Mr. Douglass draws a parallel between human tears, negative emotion... and Mr Douglas argues that tears are made of negative ions. I kid you not.
Do not get me wrong: TITZ is worth buying and reading. There are legitimate points and suggestions that any trader would do well to consider.
On the other hand, the arena for this type of trading book has changed since its publication. Other books exist that address the issues contained within TITZ: not only are they more comprehensive, but the better ones suggest action plans and techniques that are immediately applicable.
TITZ is not a panacea. Read it for good measure, but other books are better.
The book you need as a private investor or retail trader!
A beginner trader will be eagerly looking for that book or website that reveals the secrets of the stock market or that money-making strategy that will make them rich beyond their wildest dreams. What they don't realise is that until you have mastered and can really understand yourself, you will find it very, very difficult to do well on your own and not wipe out several accounts in the blink of an eye.
Strangely, Trading In The Zone is the book that you don't want but, ironically, it is the book you that you need! There are no money-making strategies, no secrets about what data releases will result in massive movements to make you ultra profitable, no tips about which markets lead others. It is about understanding yourself so that you take responsibility for every trade and behave in a rational manner when dealing with an often irrational market.
If you only ever read one book, then this must be the title to read.
How many times have you gotten to the end of the day and realized that many of your trades were against the prevailing action? (You consistently entered long on a down day or vice versa...) This is the first book I've read that discusses how we perceive price reality, -about why it is nearly impossible to see that the price is going against you if you've got your heart set on the idea that the market is 'just about to turn' - and how trying to predict what will happen next regarding the position you have just entered is bound to cause you heartache, humiliation, and a smaller bank account.
There are no charts in this book, no indicators, no discussion of setups, edges, or lowest risk entries. This is a book about becoming the house, the casino, about playing the probabilities, about letting go of the need to be 'right' in any given moment. It's about learning to think about market action in a way that can bring consistent results and learning how to trust yourself.
If you've spent some screen time, and studied fundamental and/or technical analysis, and still can't get above break even, this book might be the one that get's you over the hump.
I think the writing could be tighter, smoother, and less repetitive, but I still rate the book 5 stars overall. It's worth twice the price, and my only wish is that I had bought it earlier. This is one of the few books that has already found its way into my 'keeper' shelf.
I bought this book after deciding that my mental state regarding trading needed a bit of attention.
Overall, I found the book worth buying and reading, and if you like me, need to look at the psychological aspect of your trading, then you should go ahead and get a copy of this book.
I must say, I found it hard reading. It took me ages getting through it. I am not sure if it was because of my reading ability, my mental state or the way it was written, but I would probably lean toward the fault being in the way it was written. I had to keep going back over section of the book to see what I had just read.
That being said, I did finish it and was glad that I kept going. If you can grasp the concepts behind the writing, you may find it greatly helps you. I think I have put off a stomach ulcer for another while :)
I have since read through some of the parts again, and do intend to go back through the entire book at least once more. I reckon that if I found it so useful after one difficult read, then the next time I should be able to pick up some more helpful mind alterations.