University of Minnesota - UMN Executive Leadership Insights
The Disciplined Trader
Book

The Disciplined Trader

Developing Winning Attitudes

Mark Douglas
Prentice Hall Press, 1990
First Edition: 1990
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

Author Mark Douglas explains that he lost almost everything he owned because of bad trading decisions. The experience led him to rigorous self-examination, and he discovered that emotions, especially fear, had led him to trade imprudently. He went on to write this straightforward, very penetrating explanation of the role of beliefs and emotions in trading. This is not an abstract academic exercise. Douglas is a trader talking to traders. He is thorough and practical in his analysis and advice. At times, his style may be awkward, stilted and even cumbersome; however, these flaws do not prevent him from communicating important, useful information. Although the book is specifically about emotional and psychological factors as they affect trading, readers are likely to notice that these influences are active in other dimensions of their lives as well. getAbstract finds that this is quite a good little book that has stood the test of time, despites changes in the technology of trading.

Summary

A New Way of Thinking

Most people who begin to trade do not know that habits and beliefs, which have served them well in the outside world, are likely to become stumbling blocks in the trading world. Trading requires much more self-discipline and self-control than many other activities.

The markets do not have the power to force you to act one way or another, any more than you have the power to force the markets to act in any particular way. As a trader, you are your own boss, completely free to make your own decisions. Moreover, you have an almost infinite opportunity to gain or to lose. Many people suffer disastrous losses, psychological pain, and enduring mental or emotional scars. They may respond to such experiences by rationalizing, denying or justifying what they have done. These responses, in turn, color their perceptions of the market and may lead them into a continuing pattern of bad decisions. The mismatch between their perceptions and the market’s realities may grow until the market forces them to face facts.

The most important fact is that although you cannot control the market, you can control how you think about it. Self-control, emotional restraint...

About the Author

Mark Douglas is renown as one of the foremost experts in trading psychology; having traveled across the world for over 20 years developing programs for, and coaching all levels of traders on, how to achieve and sustain a successful trader’s mind-set. An award-winning author of the industry classics Trading in the Zone, The Complete Trader and The Little Book of Trading Performance co-written with Paula T. Webb, a leading educator in the field of prosperity psychology.

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