May 31, 2012

Michael Douglas's Mind over Market

Michael Douglas has this wonderful interview on YouTube. Watching the interview reminded me of the points from his all-time famous book "Trading in the Zone".

Thinking in probability

This is about not expecting to win every time. He mentioned that when we are trading with an edge, we swap positions to be the casino. We will win in the long run like how casinos work. Trend following strategies are known to have long periods of drawdowns. The key is to stay in the game, believe in yourself and your system.

In the zone

Someone says humans always look for comfort. Our behaviours change base on the outcome. We tend to take the easier path. That's how our brains are programmed to work, especially in times of duress. This concept of "in the zone" basically tells us to practise so hard that we subconsciously do what we have to do when we are in a trade, when we are experiencing the pressures from the market, to not let our conscious brain determine out next course of actions but instead leave the decision making to the subconscious part of our brain.

No comments:

Post a Comment