I came across this on X (credit @rudy2000k) and thought it too good to pass. Despite being fully versed in the 5 Fundamental Truths and the 7 Principles for Consistency, I realised I have recently been guilty of falling for some of the common psychological Traps & Fixes.I’ve pasted it into notes on my iPhone for easy reference and referral to help keep me on track.
Trading in the Zone — Key concepts
Core Message
- Trading success is 80–90% psychology & mindset — technical analysis/strategy is secondary once you have an edge
- Most traders fail not because of bad methods, but because of fear, greed, lack of discipline, and trying to predict the unpredictable
- Goal = reach “the zone” = fearless, disciplined, process-focused state where you trade instinctively without emotional interference
5 Fundamental Truths (Think in Probabilities — Accept These Deeply)
- Anything can happen (no matter how perfect the setup looks)
- You don’t need to know what is going to happen next to make money
- There is a random distribution between wins and losses for any given set of variables with an edge
- An edge is nothing more than a higher probability — not a guarantee
- Every moment in the market is unique (past does not equal future exactly)
The 7 Principles for Consistent Execution (Douglas’s Practical Framework)
- I objectively identify my edge (know exactly what gives you ≥ statistical advantage)
- I predefine my risk on every trade (set $ or % loss limit before entry — no exceptions)
- I completely accept the risk (emotionally neutral to the possibility of loss — no hope or fear attached)
- I act on my edge without reservation or hesitation (pull the trigger instantly when rules align)
- I pay myself as the market makes money available (take profits according to plan — don’t let winners turn into losers out of greed)
- I continually monitor my susceptibility to making errors (self-awareness — catch revenge trading, over-sizing, moving stops early, etc.)
- I understand the absolute necessity of these principles and follow them with no exceptions (rules > emotions every time)
The Four Primary Fears Most Traders Battle
- Fear of being wrong → causes hesitation, revenge trading after losses
- Fear of losing money → leads to premature exits or tiny position sizing
- Fear of missing out (FOMO) → chasing bad entries, over-trading
- Fear of leaving money on the table → moving stops too far, holding losers hoping for reversal
Winner’s Mindset Shifts (Key Attitude Changes)
- Trade without fear of being wrong (focus = process, not outcome of single trade)
- Embrace uncertainty — stop looking for certainty in an uncertain environment
- Detach self-worth from P&L → your identity is not your last trade
- Consistency is a state of mind, not a function of the market
- The market is neutral — it doesn’t know you exist; only your beliefs create pain or pleasure
Common Psychological Traps & Fixes
- Trap: Over-analysing after the fact → Fix: stick to pre-trade plan; post-trade review only for rule adherence, not prediction
- Trap: Tilt / revenge trading → Fix: mandatory break after 2–3 consecutive losses or daily loss limit hit
- Trap: Moving stops / rules mid-trade → Fix: treat rule change as new separate trade (forces reflection)
- Trap: Size up after wins, size down after losses → Fix: fixed risk % per trade regardless of recent results
- Trap: “This time is different” → Fix: return to the 5 truths — every moment is unique
How to Enter & Stay in “The Zone”
- No fear of consequences (fully accept predefined risk)
- Complete trust in your edge & rules
- Focus only on the present moment & next valid setup
- No expectations on any single trade (expectancy exists over large sample)
- Emotional neutrality — treat +$5000 & -$5000 the same way mentally
- Instinctive action (thinking drops; flow state takes over)