Tradingpsychologie

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

About the work: Most trading mistakes arise 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 "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 our inner state into these signals. After three winning trades, we 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 a corresponding (often fatal) expectation of upcoming events.

Douglas presents five cornerstones of successful trading, the internalization of which will lead to a significant change in trading style for 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 success.
3. It is particularly about thinking in probabilities.
4. Most difficulties arise when traders believe they are thinking in probabilities, but they are not actually doing so.
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.