Trading In The Zone - Mark Douglas

[shadowninja]

Started reading this book. It makes trading sound almost spiritual in nature! I wonder if a buddhist monk would make a successful trader.

 

[dbphoenix]

Started reading this book. It makes trading sound almost spiritual in nature! I wonder if a buddhist monk would make a successful trader.

A trader once wrote that if you want self-enlightenment, you can go sit in a cave somewhere with a Buddhist guide for fifteen years, or you can trade S&P futures.

Db

 

[rols]

A trader once wrote that if you want self-enlightenment, you can go sit in a cave somewhere with a Buddhist guide for fifteen years, or you can trade S&P futures.

Db

What if you did both?

One hand could do the clapping and the other click the mouse.

 

[Crap Buddist]

I did read his Disciplined Trader book, not the zone though. BUT I think douglas would make a good Buddhist Monk maybe ?

Its been written (Wizards,I think) that a by product of a trader going through a trading journey may result in a deeper grounding or reaching a quiet peace within the self. Makes sense too as I can see how perhaps we need ? to submit , shed ourselves so we can be free to focus on the markets mind. Not our own.

This popped into my head today....

The last mind a person will attempt to change is his own. CB.

How long it takes any individual to get to see that is and should be? part of the challenge of trading. Well like it or not its very likely to be a factor more often than not so its MATERIAL, I'd say.

Have a good read lets us know any good points worth discussing or of interest that stick out...

cheers..

 

[nine]

With a name like Shadowninja you will have to follow the zen school. So you need a teacher who will smack you on the head a few times if you lose concentration .... and the market will do that for you :cheesy:

I think you're on to something.

Buddhists seek to understand their minds so that they can be supremely happy. Life gives them opportunities to reduce attachment and see the underlying nature of their thoughts. They try to see things as they arise so they can perceive their temporary natures.

Traders need to understand their minds so that they can be supremely profitable. Trading gives them opportunities to reduce attachment and see the underlying nature of their trading impulses and resistances. They try to see things as they arise so they can perceive their temporary natures and react using their plan instead of their emotions and impulses.

 

[shadowninja]

Interesting story from the book...

The semiretired chairman of the board of the brokerage firm was a longtime trader with nearly 40 years of experience in the grain pits at the Chicago Board of Trade. He didn't know much about technical analysis, because he never needed it to make money on the floor. But he no longer traded on the floor and found the transition to trading from a screen difficult and somewhat mysterious. So he asked the firm's newly acquired star technical analyst to sit with him during the trading day and teach him technical trading. The new hire jumped at the opportunity to show off his abilities to such an experienced and successful trader.

The analyst was using a method called "point and line," developed by Charlie Drummond. (Among other things, point and line can accurately define support and resistance.) One day, as the two of them were watching the soybean market together, the analyst had projected major support and resistance points and the market happened to be trading between these two points. As the technical analyst was explaining to the chairman the significance of these two points, he stated in very emphatic, almost absolute terms that if the market goes up to resistance, it will stop and reverse; and if the market goes down to support, it will also stop and reverse. Then he explained that if the market went down to the price level he calculated as support, his calculations indicated that would also be the low of the day.

As they sat there, the bean market was slowly trending down to the price the analyst said would be the support, or low, of the day. When it finally got there, the chairman looked over to the analyst and said, "This is where the market is supposed to stop and go higher, right?" The analyst responded, "Absolutely! This is the low of the day."
"That's bull****!" the chairman retorted. "Watch this." He picked up the phone, called one of the clerks handling orders for the soybean pit, and said, "Sell two million beans (bushels) at the market." Within thirty seconds after he placed the order, the soybean market dropped ten cents a bushel. The chairman turned to look at the horrified expression on the analysts face. Calmly, he asked, "Now, where did you say the market was going to stop? If I can do that, anyone can."

 

[jacinto]

shadowninja:

your abstract cannot be posted in a BB due to copyright infringement.

i have deleted it. Please do not post it again, thank you

 

[shadowninja]

Oops. Sorry.

 

[Tawe Trader]

I wonder if a buddhist monk would make a successful trader.

I believe an ancient Japanese Samurai would have made a excellent trader.

From what I have read, they were prepared to spend years mastering their craft and then themselves (their mindset). They were extremely disciplined, focused and fearless, with superb levels of concentration and patience.

I haven't read any TA books for a while now, but I have been reading as much as I can regarding the Samurai Warrior and anything Zen related.

 

[TheBramble]

I haven't read any TA books for a while now, but I have been reading as much as I can regarding the Samurai Warrior and anything Zen related.

An excellent place from which to come into trading or into which to take a side journey. But I'd add TA to the reading list...Not much point being supremely calm and not caring, but not having a clue.

 

[Tawe Trader]

But I'd add TA to the reading list...Not much point being supremely calm and not caring, but not having a clue.

Yes Mr Bramble I agree, every trader needs a through understanding of TA but I didn't move from being a losing/breakeven trader until I REALLY started working on my 'inner' self earlier in the year. Since then I haven't had a losing month.............

I bought my first TA manual in 1999 and I have spent thousands of hours reading about TA on the net and I've read all the 'classic' TA books. Granted, I now know plenty about indicators and I am well versed in numerous trading setups etc but IMHO there's more to trading than the technical side of things. I spent over 6 yrs being a losing trader while reading the TA stuff.

It may be that most of my problems are in my 'head' so perhaps that why all this psychobabble and Zen stuff helps me. Everyday I'm having a battle with myself, I am in a constant state of conflict with myself with regard to trading with the direction of the FTSE hourly trend. Never a dull day for me - I am always having to dig myself out of a hole !

 

[TheBramble]

I am in a constant state of conflict with myself with regard to trading with the direction of the FTSE hourly trend. Never a dull day for me - I am always having to dig myself out of a hole !

As an aside to your initial post (and intent), what’s so hard about the hourly trend on the FTSE? ‘Hole digging out of’ is great exercise and a lot more useful than the effort expended in the previous direction.

And as much as I admire The Golden Bear’s achievements, I’d add ‘not caring’ after you’ve done all you can do to prepare…It’s key to both the preparation and the Zen state.

 

[Tawe Trader]

.....what’s so hard about the hourly trend on the FTSE?

Nothing really, it's just that I seem to want to make life difficult for myself - it's like oh the hourly FTSE trend is up - know what I look for places to go short, trading with the trend is too easy anybody can make money that way ! Don't get me wrong the above statement makes me sounds as if I'm full of crap but these are the inner demons I fight most days. Trading profitably is one of the hardest jobs in the world and I don't seem to help myself by going against the flow of the mkts.

Take this morning, the method I use for determining the 60 min FTSE trend is in bullish mode. After 8.45am the FTSE Future was above it's pivot so again that's bullish, what do I spend the rest of the day doing - looking for places to go short and going short. I know it's wrong and I musn't try to pick tops but I seem to have a built in bias about going with the trend.

So I beat myself up every night and tell myself the next day you will go with the trend, no matter what.

Since March though (perhaps a lot of is not caring too much about any one trade through my Zen-like tranquility - yeah right!) my trading account is up and in profit at the end of every month just by having a couple of big winners, but if I traded with the trend I could also reduce a lot of my smaller losses.

Any thoughts ?

 

[TheBramble]

.....what’s so hard about the hourly trend on the FTSE?
[...]
Nothing really,
[...]
Any thoughts ?

Spot on.

Trade only with the trend.

Only take trades in the direction of the trend.

The way the trend is going, take only trades in that direction.

If the trend is up, only take Long trades.

If the trend is down, only take short trades.

If the trend is neither up nor down, take no trades.

At the same time you take a real trade WITH the trend, take a trade in the opposite position - on paper.

If you take any real trades against the trend - punch yourself, hard, until you stop taking those bad trades.

Trade with the trend.

Trend trades only.

Oh, almost forgot, make sure the 4 hr and daily trend are going in the same direction too...

 

[rols]

Spot on.

Trade only with the trend.

Only take trades in the direction of the trend.

The way the trend is going, take only trades in that direction.

If the trend is up, only take Long trades.

If the trend is down, only take short trades.

If the trend is neither up nor down, take no trades.

At the same time you take a real trade WITH the trend, take a trade in the opposite position - on paper.

If you take any real trades against the trend - punch yourself, hard, until you stop taking those bad trades.

Trade with the trend.

Trend trades only.

Oh, almost forgot, make sure the 4 hr and daily trend are going in the same direction too...

Could be the lyric for the Trader's hymn.

Let's get this straight....

...the trend is your friend. Right?

Just checking.

 

[grantx]

Weren't the kamikaze the successors of the samurai?

Grant.

 

[dbphoenix]

I know it's wrong and I musn't try to pick tops but I seem to have a built in bias about going with the trend.

Maybe your definition of "trend" is not as clear as you think it is, and something in the back of your mind is rebelling against the choices you make, or think about making, or wish you'd made, or wish you hadn't . . .

Db

 

[Tawe Trader]

Yes I could try out the physical self-harming bit, on the weekend I think I'll rig up a device
to give me an electric shock if I fail to adhere to my rules and trade with the trend !

Seriously though, yes I am happy with what I use to determine the trend direction and I do trust it. It's just that I think I am contrarian by nature.

I have decided to run two trading accounts for a while, trade my main account with the trend and to the rules of my trading plan. In the other account (call it my 'gambling' account if you wish) I'll trade small stakes against the trend ie try and be 'clever' and pick tops/bottoms. It will be useful to see how things pan out and maybe the inner conflict will burn it's itself out without to much financial damage.

With regard to the Samurai, yes the were extremely barbaric but if we as traders can take the good attributes from them, I think it can help us.

 

[TheBramble]

I have decided to run two trading accounts for a while, trade my main account with the trend and to the rules of my trading plan. In the other account (call it my 'gambling' account if you wish) I'll trade small stakes against the trend ie try and be 'clever' and pick tops/bottoms. It will be useful to see how things pan out and maybe the inner conflict will burn it's itself out without to much financial damage.

Sounds like a great idea. Good luck.

 

[firewalker99]

... After 8.45am the FTSE Future was above it's pivot so again that's bullish, what do I spend the rest of the day doing - looking for places to go short and going short. I know it's wrong and I musn't try to pick tops but I seem to have a built in bias about going with the trend.

So I beat myself up every night and tell myself the next day you will go with the trend, no matter what.

Any thoughts ?

That sounds painly familiar. I used to do very similar things months ago. I had planned out the day in advance to go with the trend (in this example say long), but then as the day got under way I kept finding myself looking for places to short. Even if there wasn't a real short opportunity to be found, I'd still try to scalp something somewhere, either to get back at a loss I made or to compensate for missing out on the long entry.

I used to have this thing for trading against the trend too. Especially when the move already was under way, I felt like there was no other opportunity than to look for a reversal, because entering now would've been chasing price right? So I somehow convinced myself there was no other opportunity than to do the opposite...

I guess what I'm trying to say is that perhaps this seemingly uncontrolable urge to take something out of the market - even if you know it has a lesser chance of succeeding - is caused by the frustration of a loss or missed trade?