Principles of successful trading from Mark Douglas

Mark Douglas is one of the most famous traders and authors of books on stock trading, or more precisely, its psychological aspects.

One of his works, “ The Disciplined Trader ,” is even present on our website.

Mark believes that all trading is based on five basic principles, knowledge of which will allow you to receive stable profits.

These principles may seem difficult to understand at first, but over time everything will fall into place.

1. If there is a possibility of losses, it can be realized - considering this principle in a practical sense, we can say that the risk of losses always exists. And you should not ignore the rules of money management, no matter how profitable the transaction may seem to you.

For example, John always opened positions with a volume of 20% of his available funds, but today a situation arose in which he had already made good money twice and he decided to risk all his funds, but this time the transaction brought a loss.

And this loss increased 5 times due to a spontaneous decision.

2. You don’t need to know the future to make money - the main thing is to find a moment when an open transaction is guaranteed to bring profit.

That is, when the price is in the most favorable position.

3. Correct understanding of profitability - you should always evaluate your profitability not by the number of transactions, but over a certain period.

If, according to statistics, 60% of your orders brought profit, this does not mean that by opening four unprofitable trades you will open a fifth with a guaranteed profit.

Just for a certain day, month or year you make a profit on 60% of transactions.

And you shouldn’t immediately open a fifth trade after four unsuccessful ones. 4. A good moment is just a good moment - no matter how attractive the entry point into the market is, it does not guarantee 100% profit.

And it reports that the price is more likely to go in one direction or another.

5. Every moment in the market is unique - no matter how much they say that history repeats itself, there is always a high probability that this time the rule will not work.

Therefore, you should be prepared for this and insure losses, no matter how standard the situation may seem.

From all of the above, we can conclude that if a trader uses the same trading system in different situations, then this system will definitely lead to losses.

The market dictates strategy, not strategy drives the market.

Mark Douglas