My mental state has been shaky lately as you guys have read. I purchased ‘Trading In The Zone’ by Mark Douglas back in February when I was preparing to depart Bitcoin trading for greener pastures in the great US equities market. I read the book and felt I had a good understanding about the concepts of a winning attitude and how to separate your emotions. The premise of trading is that of the ‘house’ in gambling. It is a probabilities game. You need a large sample size but a common problem is that you always carry your last 1-3 trades with you. As I reread the book yesterday and today, I seriously felt as though Douglas had written it for me specifically. What a difference a few months in the trenches can make when it comes to relating to topics discussed in that book. If any of you are trading and feel extreme swings mentally, pick it up. I promise you it is worth the few bucks it costs.
Confidence is a huge part of trading. If you follow your rules every time, you will become confident in yourself because you can TRUST yourself. You know that you will cut your losses when it says to. You know that you will lock in your profits without question and not get overly greedy. My string of 3 losers weighed so heavily on me I couldn’t believe it. Today I put on two trades. I could feel myself getting tense when it moved against me and then I just rambled off why I entered the trade and what my plan was for it. I was completely content with the money I put on the table to see if the market would work in favor of my plan. I realize that every moment is completely unique and that just because something happened before does not mean it will happen again.
The book opened up my eyes this time around. I plan on reviewing all my highlighted passages on Monday before the open to remind me what this is all about.
I took one screenshot today because it captured both of my trades. Both of these trades were pullback plays. At the red trend line I bought puts for both anticipating the markets/stocks to continue the down trend of the day. The green circle indicated my entry and the red circle indicates my entry. I was 1 for 2 on these plays that I initiated very late in the day. I spent the entire morning finishing up the book and I’m glad I did.
I may say this a lot but I’m looking forward to next week. The journey of transforming my mental state is going to be a 24/7 job but considering the passion I have for this, I’m ready 100% without a shadow of a doubt.