5 FUNDAMENTAL TRUTHS TO TRADING

Mark Douglas, a person I consider one of the pioneers of trading psychology talks about these 5 Fundamental Truths to trading along with 7 Principles of consistency in his book Trading In The Zone (A book ever trader should own). I think it’s really important to understand all of these truths and principles and believe them if you want to be consistent in your trading.


THE 5 FUNDAMENTAL TRUTHS OF TRADING:
1. Anything can happen.
2. You don’t need to know what is going to happen next to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.


THE 7 PRINCIPLES OF CONSISTENCY:


1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely ACCEPT the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore,  I always follow them with confidence and joy.

Nifty And Bank Nifty Analysis For 2nd February 2012

Nifty And Bank Nifty Analysis For 31st January 2012

Nifty And Bank Nifty Analysis For 30th January 2012

FUNDAMENTAL TRUTHS OF TRADING

THE 5 FUNDAMENTAL TRUTHS OF TRADING:
1. Anything can happen.
2. You don’t need to know what is going to happen next to make money.
3. There is a random distribution between wins and losses for any given set of 
variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.




THE 7 PRINCIPLES OF CONSISTENCY:
1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely accept the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.




BREAKING THE HABIT
1. I trade what I SEE, not what I think.
2. I cannot control the market, I can only control MYSELF.
3. My trading mindset is the key to being SUCCESSFUL.
4. I will not be biased as where the market is going.
5. I BELIEVE the markets are 100% psychological.
6. I strictly adhere to my RULES.
7. Losing is a part of the business.
8. Trading is a business and I am here to PROFIT.




TIPS FOR TRADER
1. “Between stimulus and response, lies our freedom to choose” – Steven Covey
2. Stick to your plan.
3. Ignore the noise.
4. Be patient.
5. Stay Disciplined and Focused.
6. Pick one methodology.
7. Undertrade.
8. Repetition is key.
9. Execute
10.“We have met the enemy, and it is us”