Powerful Trading Psychology Lessons from Mark Douglas – Part I
You DON’T need to be smart to trade.
“I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstanding intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.” – Mark Douglas
Mark basically highlights one of the misconceptions that people have about Stock trading.
A lot people (including myself at one stage) thought to be an active trader on any financial market, you needed to go through the motions of: university degrees, being in sync with political events and have the means of receiving ‘up to the minute’ news before others did.
This is far from the truth and just a fictional stereotype.
It takes hardly any effort to set yourself up as a Stock trader. Thanks to the advances in technology we can download the required software and setup up an account literally in minutes.
Mark’s quote states that intelligence has little effect on trading performance. Would either Einstein or Isaac Newton have made good traders? Maybe not.
The Stock market is filled with ‘average’ everyday people.
Obviously you need some level of common sense, but that’s true with every profession. At the end of the day, it doesn’t matter what degrees or qualifications you hold, they won’t help you in the markets.
The high school dropout could potentially reign supreme in the Stock market.
The uneducated high school drop out has just as much of a chance to succeed with Stock trading as the guy holding a PhD. Academic achievements don’t really give you an unfair advantage in the markets. It all comes down to your attitude, determination and ability to learn from your mistakes that build a successful traders mindset.
Bharat Jhunjhunwala MFTA, CMT, CFTe, MSTA