Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude

The zone is a fearless, flexible and probabilistic state of mind that is consistently focused in what Douglas calls the "now moment opportunity flow" of the market based on objectively-identified edges. According to Douglas, the "now moment" means that "there is no potential to associate an opportunity to get into, get out of, add too, or detract from a trade with a past experience that already exists in your mental environment" (pg. 130). Consistently successful trading requires a high degree of mental flexibility, based on certain fearless attitudes and a probabilistic mind-set, to flow in and out of trades based on what the market is saying about the possibilities from its perspective. One must have a trading system that eliminates one's susceptibility to typical trading errors (as listed on page 186) and duplicates how a casino operates. Like the casinos, the consistently successful traders know that over a series of events (or trades), the odds are in their favor, but in order to realize the benefits of the favorable odds, they have to participate in every event (or trade). In other words, they know they won't be successful on every single trade at the micro level, but on the macro level the outcomes over a series of trades will produce consistently successful results provided that the following is true: 1) one has an edge that genuinely puts the odds of success in your favor; 2) you can think about trading in the appropriate manner, and 3) you can do everything you need to do over a series of trades. Regarding the first, you must know what defines an edge which requires you to be well educated in market/technical analysis. Douglas assumes that most of the people reading his book have this education. Regarding the second, Douglas provides five fundamental truths that must be mentally absorbed to approach trading successfully. Regarding the third, Douglas provides a trading exercise in the last chapter that requires your trading system to fit within seven specifications (from trade entry to accepting the risk). The purpose of the exercise is to help integrate the five fundamental truths into your mind (belief system). In addition to the five fundamental truths, Douglas also provides in the last chapter seven complementary principles of consistency which he calls "sub-beliefs" to, or reasons for, the primary objective of believing one is a consistent winner at trading. He also introduces and explains the trader's three stages of development: the mechanical, the subjective, and the intuitive. The first ten chapters of the book contain a lot of general information related to beliefs and expectations that is beneficial to self-understanding outside of trading but is specifically applied to trading as preparation for the essential and culminating last chapter, Thinking Like a Trader, which includes the trading exercise. For experienced traders, I recommend completing the survey at the beginning of the book and then, after one has s

The process of becoming a successful traders is not just about learning about markets and developing a trading system that works, there is so much more to it than that. Most people get wrapped up in practical nuts and bolts of trading or investing but miss the most important step. Developing the proper mental and psychological skills.To become consistent, it is essential that one spend some time getting to know what the market really is as opposed to what the trader would like it to be. The market is not your enemy, does not owe you anything and does not care whether you win or lose. It just is. The sooner one accepts that, the faster he/she progresses. This means performing a careful self-assessment, identifying beliefs that will short circuit consistency and getting them out of the way. As Douglas describes it, 95% of the trading errors all traders make are due to his or her attitudes (fears) about four things. 1) being wrong, 2) losing money, 3) missing out and 4 ) leaving money on the table. Getting over them may seem daunting in the beginning but that is where the book comes in. Douglas also describes the process that all successful traders must go through and that is developing a probabilistic mindset. All great traders have learned to think in probabilities. This means that every market decision is only made once a risk/reward ratio has been determined, stop losses and profit goals established and pre-determined conditions for taking the trade known. By removing the extraneous "noise" that causes undue emotional and psychological stress, decisions become easier to make. As is true of most things in life, sounds easier to do than it is but the good news is that with a little practice and with help of an exercise outlined in the book, it is very doable. Zone is a book that you will want to read multiple times. As Douglas says, it is a book that took him five years of his life to write. It was obviously a labor of love. This comes through loud and clear when reading it. The book is also one that should be in the library of anyone in the markets today, no matter whether your approach is straight technical analysis, strictly fundamental or (if you are like me) somewhere in between. My book is covered in post-it notes, underlines and yellow highlighter. It is also one of the three best books on trading to date that I have reviewed.Matt Blackman - Technical trading writer/reviewer and regular contributor to Technical Analysis of Stocks & Commodities Mag, Traders Mag (Europe), Working Money, Traders.com Advantage and SFO Magazine, Investopedia.com and the thechartmaster.com

I have to say something VERY strong about this book. It made me STOP trading. I realized about a quarter of the way through this book that I was NOT on my game and that I was open fodder for the real Pro's that have the skills and abilities that he speaks of. I am a professional trader and I even help run a very successful trading firm, but I've been trading by feel and emotion for too long now and have lost about 200,000 the past 3 years in the market and I just couldn't take it anymore.By reading this book, by stopping trading and re grouping, I know my trading will be much better and that every trader that trades my money or my firms money, will be required to not only read this book, but to recant the most important parts.Dont just buy this book, learn it and trade by its valuable tenets.Mike Levin

     If you are like most people, after your first few losing trades you set about to learn better market analysis. After your next string of losers you learned about risk management. But there's still one more challenge to conquer; yourself.     That is the major premise of this book. If it sounds like wishy-washy psycho-babble to you, I'll only say that I would have agreed -- four months ago, before I quit my 20-year technology career, obtained a Series/7 license and joined a professional day-trading firm. I now believe most people would lose money if you gave them 50/50 odds on whether or not it was going to rain tomorrow.      In other words, successfully forecasting the market is not enough. Why not? Well, this book explains why not. It has to do with one's sense of self-worth, one's moral judgment of money, one's work-ethic, one's tendency to focus on good news while ignoring bad, and other things.      "Zone" was recommended to a friend of mine by a professional floor trader who told him, "I wish I had read it before starting two years ago. Don't place another trade until you do." Well said. Does this apply to investors as well as traders? Oh, absolutely! If you have ever said to yourself, "I'm not selling that stock while it's down, I'll wait until I have a profit in it," then for the love of money, read this book.      Finally, read "Zone" before Douglas' earlier work. If you still want more then read "Disciplined Trader" for a general review plus a deeper exploration into the author's philosophical and meta-physical theories.