September 4, 2015 at 2:11 pm
Like any other calling, trading takes years of practice to achieve the ultimate level. While specialists and legal advisors have experienced advanced education to get their license to practice, traders are obliged to get information on their own. If you are in it for the quick buck, think again. The test is intense however the accomplishments are remunerating. There are 6 different stages in trading that all traders need to go through to be a successful trader, so let’s take a look at them.
This is the first stage where all beginners start at. You may have grabbed a book on technical analysis some place, knew about a trader making millions, or got lucky in a stock speculation. All things considered, how hard could it be? The cash sounds appealing and the opportunity to be free sounds alluring.
I don’t intend to smash anyone’s fantasy, but the individuals who succeed in trading are in the minority! Give or take 90-95% of traders don’t succeed. In the first stage, traders are optimistic. You immediately open a live account and start trading. In all actuality, you have no idea what you are doing. You will buy just to see the market go the opposite direction or you will short just as the market starts to rally. The majority of your trades you take are done on emotions. You buy simply in light of the fact that the markets feel strong with no logical reason. You are in the unconscious incompetence stage. You have no idea how the mechanics and psychology of trading works. What’s more terrible? You are not yet aware that you don’t have the foggiest idea. Most traders will blow their account at this stage.
In this stage, you have lost enough cash to acknowledge what you are doing is totally off-base. You begin to understand that you don’t have any clue what is going on.
You will then read as many technical analysis trading books and articles as you can. You will study and memorize every technical pattern known to man. You will read about all the indicators you can find like ADX, moving averages, Fibonacci lines, pivot points, MACD, Bollinger Bands, channels, to name a few. You will plot them on your charts and invest hours searching for an indicator that works. You will be extra confident now on the grounds that you think you have discovered the holy grail of indicators. Yet, despite everything you keep on losing cash on a regular basis. You realize that your indicators are lagging and that all the other new traders are most likely looking at the same thing. You know that you were a sucker to believe in indicators.
You begin to understand the measure of work required and the tremendous learning curve to go through in order to understand the markets. Traders, at this point, may find it overwhelming and quit. Traders with a stronger mindset will push through and gain even more knowledge than what they had. You need to be hungry for success and should have developed a strong passion for the markets in order to clear this stage. This is where you will search for mentor programs, chat rooms and seminars to join.
You understand the necessary components that are needed to develop as a trader. You will ask thousands of questions and bug each professional trader you meet. You will read hundreds of articles a day that are related to trading. You will begin paper trading, develop trading systems and create risk parameters for every trade you take. You will go on a hunt for self-understanding to master your psychology problems. You will imagine each probability on a trade before you take it. This is the genuine learning stage. You are making a decent attempt to develop your edge in trading.
This is the stage in which you figure out that you need to specialize in specific markets and trading strategies. Without you realizing it, you have at long last discovered your style. You adhere to your system and you improve on it. You understand that you require an edge whether it’s supply and demand trading or being a Fibonacci master. The vital thing is that you are gradually transforming yourself into a specialized trader. You test your systems and they appear to work. You gain a tremendous amount of market knowledge.
You ponder back on yourself and you can’t help but laugh at your stupidity. In spite of the fact that you have not made enough money to call yourself successful, you are proud of your journey and achievements. You understand that the Holy Grail is not about indicators or some price pattern. You use strict money management in your trading plan. You begin to acknowledge losing as a natural piece of the game. You now understand that trading is a game of probabilities. This is when you start taking high probability trades. Your psychology has shifted from a beginner outlook to an expert one.
You trust your trading strategy and begin taking trades systematically. You are starting to gain consistency and are meeting your daily goals on a regular basis. You have now reached the conscious competence stage. You are now aware of what your strengths and weaknesses are as a trader. You can control your emotional swings because you understand your own psychological makeup. You are finally at the stage where you are able to trade for a living.
In this last stage, you totally understand the markets you are trading. You can now predict the direction of markets more often than not. You applaud yourself for the success you are having after going through all the trouble to reach this stage. When you talk to other traders, you can see in which development stage they are in. Individuals begin approaching you for trading guidance. You have developed a particular trading technique that speaks to you. Taking trades have become like second nature to you. You keep your head high but still remain humble. Congratulations, you have achieved what not many traders will ever achieve in their lifetime.
Trading is one of the toughest careers that you can choose. It can be a tough journey for some. If you enjoy the challenge, you will most certainly enjoy the feeling of accomplishment at the end. Remember that you should give your 200% if you truly want to make it to the Expert Trader Stage… Goodluck and make the best of your journey!
SO THE QUESTION IS – WHAT STAGE ARE YOU ON?
September 15, 2015 at 6:19 am
Damn these stages could not be more accurate. I guess we all walk the same path after all. At the moment I’m at stage three. I am starting to gain more knowledge on how the markets actually work. I do ask a lot of questions as you stated so please bear with me if I get a little irritating haha.
I am still having some huge problems with my psychology when it comes to trading. I wish I could just overcome this aspect and move on to the next stage. At least I am not fiddling with fancy schmancy indicators anymore. Reading the price action has taught me so much of the market the past few weeks. It is definitely what I will be focusing on moving forward.
Signing out… the rock
September 15, 2015 at 4:33 pm
I hate to admit it, but I’m still at stage one – the clueless trader! Looks like I still have a looooong way to go. I really want to become successful, so I’m sure that I’ll enjoy the journey. This website looks like a great way to help me through my journey.
Reading this article I have already saved myself a lot of trouble… Learning that there is no such thing as the Holy Grail and there are no magic indicators to make you millions. This knowledge will greatly accelerate my learning. I can’t help but wonder how long the journey will take me. I can’t wait to be profitable in the end:-)
September 15, 2015 at 9:41 pm
I think I just saw myself in your article… where did you get the picture? I am talking about the baby in stage 2…. Haha 🙂
Good content as usual!
September 16, 2015 at 11:14 am
I am proud to say that I have finally reached stage 5. I have been working my ass off for the last 3, almost 4 years. I had my ups and downs but I am happy with where I am. Still not ready to quit my day job though… that will probably happen in a year’s time or so, depending on how things go. I am thinking of also doing some long term investments so that I have a constant income.
I will still do everything in my power to reach the final stage; I just have to work on my psychology.
June 30, 2016 at 8:24 am
Strategizing your investments is critical for your overall binary options trading success. Just as trades vary, applying the correct binary option strategy is also a dynamic art all traders ought to master. In order to obtain minimal financial risk, reach maximum trading flexibility and simplify the entire trading process, we have gathered below some of the top trading strategies today’s traders frequently apply.
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