How to create the pain-free state of mind

[clylbw]

Hi,

I have spent the weekend reading Mark Douglas' Trading in the Zone'. It is spot on about the psychological problems that cause pain and fear in my trading; however, it does not talk much about the specific measures I can take to overcome such problems.

I wonder what kind of specific measures I can take to overcome the psychological problems caused by pain and fear, and create a pain-free state of mind with which I can perceive the flow of the market and act upon it from a objective view? Should I try to achieve this through trial and error in trading, or should I take some kind of 'training'?

BTW, what do you think about another book by the same author, The Disciplined Trader? Is it more detailed about the specific measures in overcoming the psychological problems? I also note there are quite a few products advertised in the website of Mark Douglas's company, but am a bit wary of such materials in general.

Thank you.

 

[dbphoenix]

The Disciplined Trader spends more time talking about belief systems and how they affect our engagement with the markets. I recommend both. Exploring your belief systems should help you understand why you experience so much pain when you experience a loss, and how that transforms into pain/loss avoidance.

 

[Trader333]

Lynn,

I agree with dbp and you may find The Disciplined Trader gives more material for specifically addressing the issues you are talking about.


Paul

 

[clylbw]

Many thanks to both of you.

Sorry for having put the thread in the wrong sub-forum ; I did not realise.

 

[dod]

Lynn,

The Disciplined Trader is a truly interestng book. It provides a deep, highly entertaining but ultimately rather depressing analysis of the way the author believes our minds work. Specifically, how we will go to almost any lengths to ensure we shoot ourselves in the foot! I don't know how correct Douglas's interpretations and conclusions are: most of what he says is hypothetical in nature; but It's definitely worth reading; and I'm sure the exercises (affirmations, etc) are worth following, if you can stick with them.

His primary experiential suggestion is to take a lengthy series of trades following a system whose rules are set in stone; to see if you can do this, without deviating from those rules, no matter what happens. He believes carrying this exercise out faithfully regardless of how much money is made or lost will equip a trader with a necessary dose of psychological fortitude.

I did this exercise, and certainly it encourages objectivity.

I think Trading in the Zone recommends something similar.

Douglas' approach is best summed up in his own words:

"All traders give themselves exactly what they deserve."

He means this in many different ways, but the main one is: our successes and failures are the inevitable result of the way we think, usually unconsciously.

I think this probably applies to life, too!


Nick

 

[donaldduke]

The best way to avoid pain in the markets is to keep losses under control.

If you take alot of small losses in a row then you should stop trading until you get a really good
signal (which you should be waiting patiently for anyway!).

Pain comes from not having any rules or a system, letting you losses get out of hand and
then firing up your emotions and vengance trading.

 

[Tuffty]

You talk about 'psychological problems caused by pain and fear'

Interesting that you view feelings as problems. One could view feelings as allies. They may be trying to protect you and tell you something. One could embrace those feelings when they arrise and thus understand oneself better. Alternatively many people find alcohol gives them a pain free state of mind.

 

[TheBramble]

I wonder what kind of specific measures I can take to overcome the psychological problems caused by pain and fear, and create a pain-free state of mind with which I can perceive the flow of the market and act upon it from a objective view? Should I try to achieve this through trial and error in trading, or should I take some kind of 'training'?.

I've always found pain and fear pretty strong words when applied to market action.

If everything (and life itself) depended on the outcome of the next trade, I guess I could envision that sort of response. The trick is to get to where it really doesn't matter and you don't care.

The way to start off feeling like this is to trade really small. So that it really doesn't matter.

It's when we trade 'meaningful' amounts (whatever meaningful means to each of us) that emotions start to come into play (or is it come out to play???).

The urge to 'make real money' by betting big is the one to watch. If you're happy to increase your consistency in being right with smaller amounts using a very small percentage of your trading capital as risk for each trade, eventually, the trade size will be large enough to feed you and maintain a rather pleasant lifestyle.

But by that time, your trade size will be 'meaningfl' to many others, but will still be to you, one that doesn't matter.

Trade small. Always.

BTW - This only applies if you want to be free of fear and pain and start to develop an instinct for market action. If you want the ultimate trip - just bet the ranch.

 

[c6ackp]

There's nothing wrong with feelings, it's emotions which can cause problems. This is true of trading and life in general. Emotions are blocked feelings associated with past events which caused you pain. No trade in the past can hurt you NOW, so past errors are no longer important. However, you must learn from those errors, sure, but any emotion associated with those errors must be released, otherwise judgement will be badly impaired. This is the difference between "psychological time" and "clock time".

Trading in the Zone is a stunning book - I would recommend reading it at least twice.

If you follow, and understand, the messages in this book, then you will change your attitude towards markets (& perhaps life too) and accept that the market IS. I've seen posts referring to how the "market will trick and deceive you" - that's completely the wrong attitude. The markets will trace their price action regardless of what you do or think. Desire, experience and an approach which accepts the risk of each trade completely should put the trader on the path towards consistency...

At one point in the book Mark Douglas refers to "intuitive trading". Anyone have any ideas what he is referring to? The idea of "intuitive trading" would seem to be the opposite of a rigid disciplined approach, wouldn't it? He refers to experienced traders entering "the zone" and being able to predict every twist and turn - wonder how that works! Any ideas?

Regards,
Steve

 

[waverider]

I haven't read the book, but my guess is that intuitive trading is when you have become so experienced that the judgements you are bringing to your decisions are ingrained. You don't even have to think about them. You're so familiar with price action, time of day, time of month, recent news, chart patterns etc you actually take these things into account without actually ticking them off. You 'feel' what the right move should be.

Think of the golf swing. When we start we go through the routine of feet placement, knees bent, am I over the ball, keep the head down etc....all before you even consider wind direction and speed. Once your a pro you still do those things, but you don't have to actually think about them - they become intuitive. You 'feel' the stance is right. And successful trades, like successful swings, subconsciously reinforce what led to the right move.

i.e. experience and practice

WR

There's nothing wrong with feelings, it's emotions which can cause problems. This is true of trading and life in general. Emotions are blocked feelings associated with past events which caused you pain. No trade in the past can hurt you NOW, so past errors are no longer important. However, you must learn from those errors, sure, but any emotion associated with those errors must be released, otherwise judgement will be badly impaired. This is the difference between "psychological time" and "clock time".

Trading in the Zone is a stunning book - I would recommend reading it at least twice.

If you follow, and understand, the messages in this book, then you will change your attitude towards markets (& perhaps life too) and accept that the market IS. I've seen posts referring to how the "market will trick and deceive you" - that's completely the wrong attitude. The markets will trace their price action regardless of what you do or think. Desire, experience and an approach which accepts the risk of each trade completely should put the trader on the path towards consistency...

At one point in the book Mark Douglas refers to "intuitive trading". Anyone have any ideas what he is referring to? The idea of "intuitive trading" would seem to be the opposite of a rigid disciplined approach, wouldn't it? He refers to experienced traders entering "the zone" and being able to predict every twist and turn - wonder how that works! Any ideas?

Regards,
Steve

 

[TheBramble]

Emotions are blocked feelings associated with past events which caused you pain.

Dunno where you got that one from Steve! Emotions are emotions. An automatic response to external stimuli. The type of response is dependent upon the conditioning of the subject, but that's about it.

Love, Kindness, Caring, Compassion, Joy, Happiness - are all emotions - but none of those (at least in my ethos) were ever experienced because of previous painful events.

You may be thinking of significant emotional experiences which potentially lead to a number of psychological problems - but again, they don't 'lead to' emotions.

 

[Tuffty]

The Bramble

I don't understand your 'small trade' theory to overcome feelings/emotions. You seem to be saying I'm not allowed to make the trades big enough to care about them. Fine, but if I make 10 of those trades that as a whole do very well or very badly then I will still have the problem of fear and greed with regard to the next 10 trades as a whole. Isn't that like saying I love my wife/husband but really don't care about them on a day to day basis.

 

[Tuffty]

The Oxford English Dictionary definition of a feeling is an emotional state or reaction.
The dictionary definition of an emotion is a strong feeling.

The c6ackp definition is different to the above.

 

[c6ackp]

Hi Tony

It's just a definition which I find useful, but I guess it's semantics and these words mean different things to different people

To me:

Love, Kindness, Caring, Compassion, Joy, Happiness, etc. = feelings (+ve)
Envy, fear, jealousy, greed, hate, anger, etc. = emotions (-ve reponses from conditioning)

I find it very interesting that hidden within business/trading books you find gems of insipiration - I found that with "Trading in the Zone" - I guess it's because we are trying to succeed at something that most people fail at and therefore to succeed you need to "dig deep"...

Steve

 

[theblackmamba]

imo the importance of trading small when starting is that you have to train your brain that your system works and gain confidence withit. you have to train your mind to not think when a signal comes up, not worry about it, not dither about it. as soon as trade comes up you have to take it, and as soon as it reaches predetermined stop just get out, don't think about it. this is easier to learn whilst size is small.
on the whole the only emotional pain i get is when i trade something i shouldnt have. it took a good few years to pull trigger every signal, and after a losing run, you have to keep telling yourself to pull trigger, but it works.

 

[Mr. Charts]

hoi tbm
I rang you this am but you were lazing on the beach!!
R

 

[theblackmamba]

mr c,
I must c if wireless network will reach the beach.
catch you later
peter

 

[TheBramble]

I don't understand your 'small trade' theory to overcome feelings/emotions. You seem to be saying I'm not allowed to make the trades big enough to care about them. Fine, but if I make 10 of those trades that as a whole do very well or very badly then I will still have the problem of fear and greed with regard to the next 10 trades as a whole. Isn't that like saying I love my wife/husband but really don't care about them on a day to day basis.

I'm not saying anything about what you are allowed or not allowed to do.

What I am saying is that if you are trading so small as to not care about the 'cost' of the risk - then you will not experience fear, greed or pain. You will simply trade. And trade a lot better than if you were 'suffering' from any of these emotions/conditions (pain is not an emotion BTW).

As a repeated exercise (trading without fear) you are less likely to experience fear as you continue. It's the same for EVERY conditioning process there is. This one is conditioning yourself to trade without fear.

As for your wife/husband (don't you know which yet?!) I have no idea how you made the connection or what that might mean - but I know a man who does...

 

[TheBramble]

Envy, fear, jealousy, greed, hate, anger, etc. = emotions (-ve reponses from conditioning)

You're free to associate any meaning with anything else, of course, but it'll make for some fairly short conversations.

Emotions aren't as a result of "blocked feelings associated with past events which caused you pain. ". Emotions are a RESPONSE TO not as A RESULT OF.

 

[Tuffty]

The Bramble
One can choose not to feel emotions. Conditioning is one such method, alcohol another.