We were fools to believe candlesticks can predict

If you read my post, you will see I explain the following

"You'd assume as the empirical evidence of his own methods, he should have been reasonably successful as a trader but this does not seem to be the case as for most of his career he has either been a losing trader or a trading coach and he explains this clearly in his book"

I then summarised the preface to explain this opinion, I suggest you re-read it to save me posting it again.

Just for the record.

"I started trading in 1978. At the time, I was managing a commercial casualty insurance agency in the suburbs of Detroit, Michigan. I had a very successful career and thought I could easily transfer that success into trading. Unfortunately, I found that was not the case. By 1981, I was thoroughly disgusted with my inability to trade effectively while holding another job, so I moved to Chicago and got a job as a broker with Merrill Lynch at the Chicago Board of Trade. How did I do? Well, within nine months of moving to Chicago, I lost nearly everything I owned." - Mark Douglas

He then spent the next decade writing a book.


Now post proof that he is profitable from trading and not as a consultant with risk free profits.

I am sorry "He is currently trading his very own account" is not going to cut it.

I have the audio book and have listened to it about 8 times now. Aside from the early career losses he describes at the beginning of the book I don't recall him explaining clearly that for most of his career he's been a losing trader or a trading coach

I do remember him referring to the methods he describes as he currently trades hem now hmself. He even offers readers to get in touch if they don't have a system to use for the trading exercise at the end.

I think your assertion that he is a failed trader is based on an assumption.

Mark Douglas has helped a lot of traders acquire the correct mindset and I think for you to call him out as a failed trader should be backed up with some solid proof.


Calling him out as a failed trader is a pretty bold statement. I'd be inclined to believe what he says over what you say.

That's you off the hook then isn't it.

I'm sorry but anything you say "isn't going to cut it"

Well it's safe to say your a fanboy but he himself said he is a failed trader, proof was posted, now where is the proof he is profitable that's all I want to see, you are the one making assumptions here that he is.

You really are testing my faith in human intelligence. Due to you being too lazy to read my original post which sparked this debate (that you have come into late), I will paste it below for you. You will see I do not make any "bold" statements , merely suggesting caution for taking 100% of his material as fact, I even applaud some of his methods.

http://www.forexfactory.com/showthre...81#post7027181

Be careful with the message in this book, I've read it myself a few times over the years and also watched his workshop How To Think Like a Professional Trader (http://markdouglas.com/workshops.html) where he explains his ideas clearer than the book in my opinion. The approach he explains makes perfect sense, it's all very logical and without question will make you a more disciplined traded BUT it does not guarantee the method you are using which underlies your strategy will make you money. Some of the concepts like trade in a series of trades, focus on the average and work on probabilities are great but unless the method you are applying these rules of execution to, actually has an edge.. you're just being a more efficient net loser (I speak from personal experience).

At one point I strongly advocated the Mark Douglas material as he appears to be a decent guy offering sensible advice in the world of sharks and scams but as a result of a better grasp on the subject and personal experience... I'm now of the belief that the material alone will not improve your chances of making money and could instead cause you to blindly persist in a disciplined process of losing money not accepting defeat. This could appear blasphemous to his supporters and I can respect that, I would have had a similar reaction prior to reaching this conclusion. Before you jump to his defence, it's worth considering how successful he has been himself as a trader. You'd assume as the empirical evidence of his own methods, he should have been reasonably successful as a trader but this does not seem to be the case as for most of his career he has either been a losing trader or a trading coach and he explains this clearly in his book.

(from Preface, Trading in the Zone)

1978, started trading, unsuccessful

1981, got a job as broker for Merrill at CBOT, "within 9 months, lost nearly everything I owned"

1982, started working on his first book "The Disciplined Trader..."

1983, left Merrill to start a consulting firm, "where I presently develop and conduct seminars on trading psychology...act in the capacity of trading coach", "as of this writing I have spent the last 17 years discussing the psychological dynamics behind trading."

2000, Trading in the Zone published

Mark Douglas is a writer, perhaps a trading psychologist or coach, but... I see no evidence of him being a successful trader.

I think that all this talk about Mark Douglas being a successful or failed trader is very interesting.

Are people missing the point that even if he was a failed trader, he made something out of it? He wrote a book which many people have read.
Because, he had the skills to do so, the skills to turn one venture into something else. Trading is about making money isn't it?

and here on FF trading is about teaching too.

Trading in the Zone (TITZ) was the first book I read for mindset, because it was popular and thus recommended.

I like the book and would recommend it too. To me, knowing that he was not a profitable trader has no consequence to his abilities to teach.

Why else would a tv personality, talking trade to mass audiences, be on TV instead of trading his/her own account? if they're such good analysts, why can't they trade?

because there is more to trading than just analysis. maybe they don't like the stress of trading, or they just prefer to be an author, or on TV.

It's like this.. two people can be given the same trade, same pair same price same direction, and one might profit while the other takes a loss in the end.
And two people can enter the same trade in opposite directions and both earn money.

Mark Douglas is a success in my book!

now I'm getting sick and tired of talking about Mark Douglas, it seems like he has spread to another thread too http://www.forexfactory.com/showthread.php?p=7042522#post7042522

how much does it take to play?


When I think about it, the 95% failed traders rate isn't really 95% if Mark Douglas falls into this category.
take FF for example: 5% successful traders, 50% failed traders, and 45% people just talking talking talking and not really trading on the sidelines so to speak.

It just goes to show that it's not only religion where if you challenge even one idea that an accepted prophet puts forward, you will incur a raft of myopic, nonsensical, ignorant comments.

For the record lets clear this up, Mark Douglas means well, advocates a reasonable approach (when put into context) but using it alone will not make you all the money you desire, as he states. If you disagree with this then I'm sorry but enough has been done here to explain why this is. For all his wisdom and sincerity, you simply cannot turn a losing method into a winning method by making more disciplined entries, having better emotional control over yourself or measuring the results over an average. THAT BEING SAID!!! the aforementioned attributes may help you become a better operator (I do not dispute this), but how efficient you are at PLACING A TRADE is not indicative of how PROFITABLE YOUR EDGE IS.

A competition between two coin tossers on who will flip heads the most, one an emotional wreck and the other Mark Douglas himself... will not yield a winner over a large sample size because NEITHER HAVE AN EDGE. Translate this to the market and you have my point of contention.

About 35 seconds in - "Mark has been a successful trader since the 80's"

Yes he does early disaster stories similar to most of the traders interviewed in the Market Wizards books.

I'm sure I could trawl through the Internet and find some more proof but you guys will work harder at disproving it and keep coming back which I can't be arsed to spend any more time on so I'll bow out of this now, let you have your last word and satisfy your need to be right.

On a constructive note the reason he was brought into this "discussion" was because one of the core beliefs he teaches on developing a profitable mindset is:

"I don't have to know what is going to happen next in order to make money".

This means confidence in your edge and the probability that it will deliver a positive outcome over time. This contradicts the assertion that "putting on a trade = predicting the market" which has fueled such a heated debate. It may be a small point but this probabilistic approach (similar to that of a pro gambler) saves you from getting married to your trade ideas and getting upset and making bad decisions when you are "wrong".

Good luck with your trading and I hope your egos don't cost you too much money.

What a gullible moron and hardcore fanboy. His shit is rehashed trading axioms and from interviews with profitable traders at best.

Ok, the best argument (and the only argument needed) that I've read against Mark Douglas' views:

1. Mark Douglas appeals to the fact that markets are random.

From his book:
But as long as they legitimately define trading as a probability game, their emotional responses to the
outcome of any particular trade are equivalent to how the typical trader would feel about flipping a
coin, calling heads, and seeing the coin come up tails. A wrong call, but for most people being wrong
about predicting the flip of a coin would not tap them into the accumulated pain of every other time in
their lives they had been wrong. Why? Most people know that the outcome of a coin toss is random. If
you believe the outcome is random, then you naturally expect a random outcome. Randomness implies
at least some degree of uncertainty. So when we believe in a random outcome, there is an implied
acceptance that we don't know what that outcome will be. When we accept in advance of an event that
we don't know how it will turn out, that acceptance has the effect of keeping our expectations neutral
and open-ended. Now we're getting down to the very core of what ails the typical trader. Any
expectation about the markets behavior that is specific, well-defined, or rigid—instead of being neutral
and open-ended—is unrealistic and potentially damaging. I define an unrealistic expectation as one that
does not correspond with the possibilities available from the market's perspective. If each moment in
the market is unique, and anything is possible, then any expectation that does not reflect these
boundary-less characteristics is unrealistic.

2. However, markets are Not truly random. Yes, don't predict what will happen going into the trade, anything can/might happen, but markets aren't really random when there is trend and government manipulation (pegging).

I have to agree here (and I'm not kidding btw). Mark Douglas is definitely a success story, because he was intelligent enough to trade something he was bad and unprofitable at for something profitable he is good at.

WOW! Kick @ss post man

trading coaches are charlatans...all of them.Unless they mentor you for no monetary gain whatsoever,probably as a need to pass knowledge so that it doesn't disappear.

of course they are... all of them (writers, coaches, trainers, software vendors ... and so on).
If they do have an edge in trading, the potential is unlimited, but rather they want to just write a book and sell it for 59.95 !!!

This thread is like this;

This guy is an awesome trader until his averaging down finally bites him in the arse.

My only question is..

Did he get “lucky” the first time or “unlucky” the second time?

Riddle me that

... That's what happens if you average down. Just a question of time before the account crashes.

The problem a lot of people have with technical trading is literalism.

The reason why SD trading, VSA, and many other techniques are deeply flawed is because they're oversimplifications of market functionality.

When Honma (the person who invented candlestick trading) wrote about his candlestick techniques, his intention was to teach a way of reading market conditions, not a handbook of exact rote patterns which should be rigidly applied. Unfortunately many people fail to expand on his principles and most don't even understand the basics of them. It takes years to become proficient at reading charts. There are many things a seasoned trader can see that new traders can't.

I have a lot of time for Honma. He was the most successful trader who ever lived, not some armchair trader whose successful at writing or teaching. This is the critical difference.

The same holds true for Wyckoff. Many years ago when I was starting out I read Wyckoff and most of it flew over my head completely. When I went back a few years later, I had a completely different understanding of what the hell he was talking about.

The funny thing is a lot of methods people are selling are repackaged bits and pieces of Wyckoff. So if you take supply and demand, auction market theory, or any small piece, it's not a robust trading system in of itself. It was never intended to be.

Trading is the art of seeing and having the ability to act on certain conditions. These conditions never look exactly the same because you never have the same amount of traders taking the same position sizes or entries in a repeatable pattern. Every accumulation and every distribution looks different, but it doesn't mean the market isn't constantly accumulating or distributing. And there is absolutely nothing random about the functionality of this process.

The old joke is, "the trend giveth, and the accumulation taketh away". Many traders can't distinguish the difference, and give back their earnings plus interest because of this.

Actually, the real reason why people fail is simple. They think the market was designed as a place for them to make money. Nothing is further from the truth. The big players who are moving the market practice deception and subterfuge to increase their earnings, they don't telegraph their intentions to give money away.

It takes years to reach the point of being able to read this properly and to become consistently profitability with large position sizes, not weeks or months. Personally, it took me a few years, literally thousands of hours of chart time and real work. Maybe some people can do it faster, maybe it would take others longer, but no one gets to skip the process if they want to be successful.

So a good way of looking at it is not to get negative or discouraged by the amount of work it takes or the amount of losses you will need to take as part of the learning process. Anyone who decided to become a trader happened to choose one of the most difficult things to master. So if people treat it the same way they would learning how to play Go, or learning a new language (like Sumerian.. lol) then it actually can be a very interesting and satisfying undertaking.

Not entirely sure why you quoted me in your reply as you don't seem to make any reference to my post.

However, I agree with you. For me personally charts are extremely useful but not for generating my entry signals... instead I use them to confirm or disprove my ideas after I've formed my bias.