‘Trading in the Zone’ is a mindset utilised by traders. This mindset or state of mind refers to your psychological state when on the job. It manifests itself as awareness and level-headedness, having a sharp eye for markets that carry high and low risks and being able to adapt based on sudden changes to the market. This is the mindset that you need to succeed as a trader. It was the focus of a book ‘Trading in the Zone’ authored by Mark Douglas, himself an experienced trader who explored the psychology behind trading.
Trading in the zone demands of you to maintain a certain fearlessness when on the job, focusing on the trades that will make them money as opposed to those that won’t. But it’s not just about being able to read and predict markets. It’s about the mindset you bring with you, which will, in turn, determine your reading of probability, a difficult read for many traders. All traders incur some risk, but if they can accept that risk and adjust their strategy based around the market, they stand a much better chance of success. And if they come across a trade in which monetary loss is probable, they can pull out without emotional discomfort and redefine their strategy.
Falling Prey to the Four Fears
Trading in the zone is a requirement for all traders to be successful. Without it, you stand to get too emotionally invested in your trades and the idea of winning and losing money. Wins and losses should be taken into account and they should not be the sole deciding factors in making a decision. Emotion is very important as well. All trades require you to maintain a level of objectivity, which will be impossible if you make emotion-based judgments. If you’re making a name for yourself in institutional trading with a bank or a hedge fund, you must maintain this mindset on behalf of your organisation.
Another point to be aware of is markets and forever changing and evolving. Whatever strategy you may have in place may be redundant a week from now. Being a successful trader is not about being able to foresee every single trend that will dominate financial markets, but rather redefine your strategy when needed. An inability to keep a clear head in the wake of a changing market will make traders more susceptible to panic attacks.
Failure to adhere to this mindset makes you more susceptible to the four fears, as outlined in Douglas’ theory;
· Fear of missing out
· Fear of loss
· Fear of being wrong
· Fear of letting a win turn into a loss
These are universal fears that can be applied to many aspects of everyday life. But in the case of trading, those fears are more sharpened.
For example, regarding ‘fear of missing out’, you as a trader will have to endure competition. Everyone wants to get their foot in the door, get ahead of all the trends. If there are indicators that everyone who puts their hand in the pot could stand to profit, you may be concerned about missing out on any profits, which means you could forgo any strategic planning you might carry out beforehand and make a potentially negative trade based purely on the comparison.
Fear of loss can be bought about due to a lack of confidence in your trading abilities, which could prevent you from taking small risks and missing out on a big reward as a result. Another self-destructive way your fear of loss could hinder you is when you’re dealing with a trade that looks set to go south. All traders should have a timing strategy when executing a bad trade. But the anxiety of losing could force you to want to see the trade to the end, forgoing all warning signs along the way. This can also prevent you from getting into a new trade. You freeze up, unable to find the right action. This trader anxiety is called analysis paralysis. If you were in the trading zone, you would recognise the signs of bad trade and pull out to look for more lucrative options.
This also links with the fear of being wrong. If you have a perfectionist mentality, you could put yourself and the company you work for in a financially precarious position because you won’t acknowledge a bad trade. In some cases you could give yourself a panic attack for your troubles.
The fear of letting a win turn into a loss is perhaps the most damaging. Many of us have heard the expression ‘let your profits run and cut your losses short’. But it is not uncommon for traders to do the opposite of this advice. Some people will make a profit and become so fearful of a changing trend, they will let panic dictate their judgment and pull out of the trend and lose out on profits they could have gained over a longer period.
The trading zone gives you a combination of tactical awareness as well as level-headedness that allows you to evade these four fears. But it is not an easy mindset to acquire and many traders fall prey to the four fears and you could find yourself riddled with anxieties that make it all but impossible for you to maintain it. This will affect your overall progression because the higher one climbs up the career ladder, the more they will be required to call upon this mindset. Without it, your career could stagnate.
Getting into the Mindset with Hypnotherapy
Anxiety help for traders is not always readily available. And to be able to trade in the zone is a mindset you need to work towards and have an environment in which to develop it.
Our hypnotherapy coaching can help you work towards the ‘trade in the zone’ mindset. We have dealt with a vast clientele who have been unable to enter the mindset, often being held back by personal anxieties and panic attacks. We can tailor a support plan based on your needs and how these anxieties may manifest and prevent you from getting into the trading zone. By the end of it, we will have broken down those psychological barriers and ensure you are performing at your best having provided the environment in which you can develop the mindset.
Ronal is aware of what is required to thrive in a trading career as he did for his illustrious career. Using his skills as a master hypnotist, he can help you tap into anxieties previously unknown to you and ensure that when in the middle of a trade, you are always in the zone. His practice also grants you access to panic attack help for traders.
Give us a call and find out how we can help you trade in the zone, leaving you less susceptible to anxiety attacks and more mentally prepared for a long-term trading career, without the risk of burnout looming over you.