Mind over matter, or how mental analysis is as important as technical
Our selection for March is another book we consider among the must-haves for any trader. Mark Douglas’ “Trading in the Zone” is a work rooted in the inner structure of the brain when it comes to trading. Well written and constructed, it is one of our favourite reads and aside from the overall even spread of valuable content, it also has those bits that manage to stick in the reader’s head, hopefully for when they need them.
This isn’t a book with strategies to take on the market, or with advice on situations that prompt specific actions. It’s an exploration of the mental side of the trading experience. Many traders initially get caught up in the action and excitement of the actual buying and selling, following how the prices change, how news events stir them up. They start to learn about the specifics of these factors, start to put their finger on what makes the market tick, but even down the road of experience some tend to forget one crucial ingredient – themselves.
Having said that, the book doesn’t make the same mistake in reverse – it doesn’t forget that the psychological aspect to trading exists within a framework made up of many different things – fundamental and technical analyses, the strength of the market and the folly of going against it, as well as some mathematics and probabilities.
One of the more pleasant features of the book is it’s rhythm and arrangement. Starting with a clear-cut comparison between the widely popular technical plus fundamental analyses and the mental analysis, the text sets off on a journey of the different aspects of trading. Chapters on responsibility, consistency, perception and beliefs slowly but surely deliver the two main things we feel are the book’s aims. The first is that in all of these “areas,” if we can call them that, there is the possibility of error and flaws. The second is that any trader should consider these areas and build them from the ground up, along with his knowledge and trading style.
Apart from the slight missteps in the beginning of the book, that have to do with some poorer examples and perhaps too strong an emphasis on the psychological without explaining it to the necessary extent, this remains an excellent piece of writing and it’s teachings will remain relevant in the changing world of online trading. Some parts may need re-reading, perhaps too laden with terminology, but we don’t see it as a negative, on the contrary – if the book was too simple it wouldn’t add anything of value to traders.
Drop us a line in the comments with any questions and suggestions about the platform, the blog or any general trading issue that concerns you. One of the commenters will get the book as a gift from us in return.