Tradingpsychologie

Advantages: A foundational work and a global classic of stock market literature – a must for serious traders. How traders master the market with confidence, discipline, and a winning mindset.

About the work: Most trading mistakes stem from fear, fear of losses or missing out on opportunities. Successful traders, on the other hand, are not afraid in their work. Mark Douglas describes how to achieve this carefree state, often referred to as being "in the flow" or "in the zone," in his standard work.

He first explains that the market sends completely neutral signals, and it is we who interpret these signals through the lens of our inner state. After three winning trades, we tend to view the next trading opportunity more optimistically than after three previous losing trades. When Douglas says we must be prepared for anything at all times, most of us would not dispute this. However, the average trader deceives themselves at this point. They believe they can predict the market and have corresponding (often fatal) expectations about upcoming events.

Douglas presents five cornerstones of successful trading, the internalization of which will lead to a significant change in the trading style of most traders:

1. More or better technical analysis is usually not the solution when we lack consistency in trading.
2. Rather, our mental state determines our success.
3. It is particularly about thinking in probabilities.
4. Most difficulties arise when traders believe they think in probabilities, but actually do not.
5. There is a process of integrating the right thinking strategy into a trader's mental system.

Thinking in probabilities, or better yet, statistical thinking, leads us to the simple realization that we cannot lose in the long run.