The five fundamental truths

Trading Psychology — Lesson 3 of 11

Mark Douglas summed up what a trader needs to believe in five fundamental truths; once they take root in your being, most psychological errors vanish with them. They are simple on the surface, profound in their effect.

Anything can happen. The market moves through an infinite number of traders, and a single trader anywhere in the world is enough to cancel the outcome of your trade.
You do not need to know what will happen next in order to make money. It is enough to have an edge and to execute it.
There is a random distribution between winning and losing trades for any given set of conditions that define an edge.
An edge is nothing more than a higher probability of one thing happening over another, not a guarantee.
Every moment in the market is unique, so do not project the outcome of the past onto the present.

How these truths free you

03 — Lesson 3 of 11

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